A survey of 2,000 UK consumers released today by SaaS company Quantum Metric has found that UK retailers could see a sharp decline in impulse purchases amidst supply chain issues. When asked how continuing shortages will impact them, consumers said they expect to keep a closer eye on spending due to expected price hikes (37%). They also anticipate planning purchases further in advance to ensure stock availability (33%). Over a quarter (26.6%) said that they would ‘make do and mend’, suggesting a move back to prioritising quality products that last.
Elissa Quinby, director of Retail Insights at Quantum Metric, commented, “In the wake of COVID-19, Brexit and inflation, we are seeing a big shift in the way people are approaching shopping for non-essentials. They are prioritising the things that really matter to them rather than buying on a whim. To combat this, retailers have to focus on providing high-quality goods at the best price, alongside a knockout customer experience.
“Take fashion as an example; people have not been going out as much and socialising, so have not been buying fast throwaway fashion. Further, the pandemic has moved a lot of people’s shopping online. To entice consumers, fashion retailers need to re-think their online stores, such as offering virtual or AR sizing through apps, ‘try before you buy’, or clothing loan schemes online.”
An opportunity to build loyalty
While consumers anticipate being more discerning as a result of supply chain issues, product shortages could also create an opportunity for retailers to build customer loyalty. Digital gift cards, for example, can offer a positive gifting experience when the desired product is out of stock. Over half (55.6%) of respondents said they would consider a digital gift card this year, with more than a third (35.3%) saying that they are likely to do so more than they have previously. However, there is still work to be done. Of the 44.4% shoppers who said they would not consider buying one, 40% cited the reason they wouldn’t buy a digital gift card as it being impersonal with a further 29% saying they prefer physical gift cards.
Quinby continues, “Digital gift cards are a great product for retailers, but less so for consumers, mostly because gifting is so strongly intertwined with providing a positive experience for recipients. Retailers need to look at what they can do to improve this experience at a time when consumers may be looking to explore alternatives to physical gifts. With new technologies and new customer expectations, retailers need to get creative about how they package and market such products, to seize the opportunity standing before them.”
A trend gaining traction in the US is offering members of loyalty schemes early access to scarce products. This could soon be a trend in the UK, with over a quarter (25.8%) of survey recipients saying that they would consider joining such a scheme to ensure they could get low availability items. Quinby adds, “This should be another home-run for retailers to bolster their customer loyalty programmes. Without it even being offered in the UK, already a quarter of the public are open to it. I predict this is something we will see start to become more widely available and it will be interesting to see uptake on this and other similar incentives for consumers.”
The big Christmas miss
The research also found that nearly half UK shoppers (46.3%) started Christmas shopping before November and of this group, a significant 73% stated this was about the same time or later than they would usually start Christmas shopping, with only 27.4% saying it was earlier than normal for them.
Quinby explains, “There is a perception in retail that everything has to be lined up for Christmas by October, for example, winter code freezes. The reality, however, as we can see from these responses, is that consumers are thinking about and acting upon their Christmas shopping before this cut-off date. Retailers need to really examine what is happening on their digital assets – websites and apps – around consumer behaviour to ensure they’re not missing opportunities to sell around Christmas by being too late to the game.”