In the report entitled Retailers’ Blind Spot for Holiday 2024, market researcher First Insight stated that uncertainty is pronounced as companies plan for the holidays.
The First Insight survey asked retail executives about their merchandising decisions and external market factors. As might be expected, pricing, promotion, and marketing decisions were of greatest concern.
Yet, in the survey, 81% of retailers stated that inflation and its resulting effects on the cost of groceries, gas, rent/mortgage and other non-discretionary items could negatively impact consumer spending on gifts and other discretionary items for the holidays. Where uncertainty was most pronounced was in setting promotional strategies, understanding item volume drivers and gauging the potential impact of inflation.
Retailers cast the holiday season outcome as especially unpredictable in the current marketplace.
After inflation, the most common concern, for 35% of retailers, was future trends and fads that don’t align with current assortment plans. The same proportion of retailers worry about online marketplaces shrinking their target market. After that 32% of retailers worried that the presidential election in the United States would hurt consumer spending. In an interesting turn, 27% of survey respondents worried that recycled and resold items would erode their target market.
In the study, First Insight noted that retailers revealed a continued reliance on historical data for critical decisions rather than current consumer feedback and suggested that those retailers who could combine predictive analytics with customer insights have a chance of leveraging insights to optimize pricing, plan promotions, and set marketing plans.
