Consumer Insights

Can Retailers Keep Up With Consumer Demands This Holiday Season?

Christmas is usually known for a general effusion of cheer and goodwill throughout communities – at least that’s how things are supposed to run. Instead, the holiday shopping season can get some consumers so riled up that things like lining up days in advance for Black Friday sales or rushing throughout malls in search of a handful of fabled discounted TVs start to seem like good ideas.

When retailers themselves become the target of these frenetic shopping passions it can be an ugly scene, indeed.

According to a recent study conducted by JDA Software, which polled more than 1,000 shoppers, 50 percent admitted that a problem with an online order over the past calendar year has convinced them not to return to that retailer during the upcoming holiday shopping season — no matter how good the respective retailer’s deals are. In all, 57 percent of consumers said that they plan to take advantage of Black Friday deals this year, but the experiences that those shoppers have could make or break their loyalty going forward.

However, as Wayne Usie, senior vice president of retail at JDA, explained in a statement, it’s increasingly becoming the case that the things that can frustrate and annoy customers – shipping fees, non-express delivery estimates, etc. — are the very same elements that are keeping small merchants in the black.

“The biggest challenge for retailers today is finding the balance between keeping customers content while maintaining profitability to meet their needs in an increasingly omnichannel world,” Usie said. “It’s no longer sustainable for businesses to sacrifice profit margins in an effort to deliver customer satisfaction and meet demands. Instead, businesses need to take on a more holistic view of their logistics and fulfillment strategy to make better informed decisions that will not only provide a consistent omnichannel experience to customers, but more importantly, turn a profit.”

The problem, according to Usie and JDA Software, is that the average consumer is increainsgly seeing on-demand shipping options and other margin-cutting eCommerce strategies as a fundamental right of the shopping experience. A whopping 58 percent of respondents told JDA that they would have their holiday purchases shipped directly to their homes in 2015, but an even larger contingent of 64 percent said that they wouldn’t even consider paying premium fees or extra costs for faster delivery. In total, half of all shoppers said that the cost of home delivery affected where they’ll ultimately place their orders.

Retailers aren’t faring much better in assuaging consumer concerns with click-and-collect programs, either. Though 60 percent of respondents sent their orders to stores with the expressed purpose of avoiding delivery fees, every other shopper reported issues when picking up their purchases. Among the chief complaints were in-store employees taking too long to retrieve their items and organizational issues finding orders in digital systems – proof that high-functioning eCommerce operations need to focus on in-store capabilities as well as the digital ones.

Of course, shoppers are buying in such volume today that returns are all but inevitable, but the average consumer isn’t content any longer to come back into the store and wait in lines at customer service. Instead, 88 percent of shoppers told JDA that the ease with which they can return their orders is a major influence on where they shop, and 62 percent said that spending their own money on postage for returns was the single largest frustration of online shopping.

In total, JDA found that 1 in 3 holiday shoppers view convenience as a fundamental part of the consumer experience during the holidays. If retailers can’t find ways to cater a more refined experience to an increasingly discerning consumer base, it could be a disappointing Q4 for many hopeful merchants — and an even more frustrating one for their shoppers.

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