Retailers are facing a smarter, more mindful and often demanding consumer today. Multiple reports and studies have found that not only do consumers expect more from the brands they purchase from but will do research and pay more for what they want.
One of the leading consumer behaviors revolves around an expectation for companies to meet criteria that align with personal social values. Sustainability is a leading theme for the way many consumers shop today, with many consumers even looking to shop largely through resale and vintage retailers.
While the transition to a fully sustainable business is difficult, reports show that consumers are willing to pay a premium for sustainable businesses. According to research from Simon-Kucher & Partners, across apparel categories and consumer groups, the hypothetical premium paid would be a 15 to 30 percent increase for mission-driven brands and a 5 to 20 percent increase for profit-driven companies that incorporate sustainable practices. These findings were also found in a report from McKinsey & Co.
Concurrently, another recent report by Russell Reynolds Associates, found that 60 percent of shoppers look to retailers to be “part of the dialogue around social issues.” And further, consumers will distance themselves from brands that fail to embrace social values. To truly hit the mark, the report shows that companies must provide a visible commitment to diversity and inclusion.
Another notable consumer behavior is convenience-seeking. Recent reports from NRF found that 52 percent of consumers allow convenience to influence at least half of overall purchases. To illustrate, the report points to services like Amazon Prime and Instacart as examples of consumers’ willingness to pay for convenience. And further, NRF noted that 66 percent of consumers are paying for a delivery shipping service with a quarter paying for more than one delivery shipping service.
And further, NRF’s findings showed that nine in 10 consumers are “more likely to choose a retailer based on convenience. Deloitte’s 2020 Retail & Distribution Industry Outlook report echoed NRF’s findings.
As Millennials become a large component of the consumer market, representing 30 percent of the population, studies show they are also leading in “major purchases.” As a generation, the Millennial is getting older and maturing in spending.
Behaviorally, as consumers, the generation is extremely thoughtful when making purchases, often spending 4.4 hours researching before making a major purchase. Though many of this generation’s spending is experiential, making it especially important for retailers to appeal to the consumer experience both in-store and online.
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