Two-thirds of consumers will leave an e-commerce site or store and shop from another retailer when an item they are looking to purchase is out of stock, signaling that retailers need to optimize inventory management this holiday season if they want to prevent lost sales.
That’s among the key findings of the AlixPartners 2024 Consumer Sentiment Index, a new study based on a survey of 9,000 fashion consumers who were asked about their purchasing decisions, along with a separate Holiday Outlook based on 1,000 consumer responses and economic projections.
The Consumer Sentiment Index, designed to analyze which shopping factors consumers value most across nine fashion retail subcategories, revealed which retailers in each of the selected subcategories are winning in consumers’ minds. Respondents were asked to rank companies based on how well they perform across five key shopping pillars: product, price, access, service and experience.
“Consumers may be shopping digital channels first, but they are back in stores and incredibly frustrated when pricing is inconsistent or they can’t find in-store what they saw online—they are tired of doing the work,” said Sonia Lapinsky, Partner and Managing Director and Leader of Fashion Retail at AlixPartners. “Retailers need to reallocate resources to what matters for consumers—nailing the seamless experience and getting the right product in the right place. It’s crucial for retailers to hit the mark this season, or consumers will take their dollars elsewhere.”
Shoppers were surveyed across the e-commerce, mass and club, luxury, jewelry, outdoor and active, department store, specialty, off price, and footwear subcategories. The responses revealed that it’s Millennial consumers’ expectations that are driving the retail agenda. While the industry often focuses on creating shiny new solutions, technology, and activations to appeal to Gen Z shoppers, Millennials are wielding greater spending power as they advance in their careers and shop for their growing households and families.
“The Millennial generation largely entered adulthood during an economically challenging period and, as their incomes have steadily risen, so, too, have their expectations across all five major shopping pillars,” added Lapinsky.
KEY FINDINGS FROM THE 2024 CONSUMER SENTIMENT INDEX
AlixPartners’ survey also revealed how fashion consumers’ top shopping considerations differ from one retail subcategory to the next and found significant variances in purchase drivers. Highlights from the survey include:
- Chanel is winning luxury; no one else is even close: Chanel resonates with consumers the most and ranked No. 1 for all pillars: product, price, access, service and experience. Chanel’s experiential initiatives hit the service experience sweet spot and reinforce quality and personalization. Runners-up Louis Vuitton and Gucci scored well on white-glove service and personalization.
- Legacy dominates the athletic footwear race; newcomers gain ground: Nike remains the clear leader in the Consumer Sentiment Index, with 2.5 times more respondents ranking it No. 1 than the next name on the list. Hoka made the list due to strength among aging consumers.
- American Eagle wins in young adult specialty: American Eagle (AEO) was ranked first by around 30% of respondents, substantially ahead of other brands. Younger buyers value a quality experience and other opinions, including giving customers time and space to shop; communicating clearly about the brand; and scoring well in customer ratings/reviews.
- Add-on services are the least important factors overall: Consumers across all demographics rank recycling programs, “Buy Now Pay Later” (BNPL) offerings, social-media shopping and non-shopping experiences (like classes, styling sessions and customizations) as their least-important shopping consideration, with 40% saying these services impact their decisions. Generationally, Millennials see the most value in these services, while Boomers see the least. Luxury and jewelry shoppers value these add-ons significantly more than other customers.
- Dynamic pricing and channel inconsistency are disliked: Consumers strongly value price consistency and transparency, with 85% wanting to see the same prices online and in stores. Retailers must offer a cohesive omnichannel experience with consistent pricing and the products consumers expect. Today, only about 10% of retailers’ online assortments are available in-store, while 82% of consumers expect to find the same product across channels.
- Department store customers have high expectations, shopping off-price if those expectations are unmet: Consistent fit/sizing (91%), product/price alignment (90%) and the best deal (90%) ranked as department store shoppers’ top purchase considerations. This indicates investments in price-optimization capabilities are necessary to prevent migration from department stores into the off-price sector. Survey respondents ranked Macy’s, Kohl’s and JCPenney as the top department store retailers.
- Less than a third of consumers think fashion retailers’ loyalty programs are effective: While 80% of consumers think it’s important for retailers to offer an attractive rewards program, only 32% say existing programs make them feel like the brand understands them and 36% say the programs incentivize them to shop more often from the retailer.
Methodology
Between June 28 and July 2, 2024, AlixPartners fielded an online consumer sentiment survey of more than 9,000 U.S.-based consumers who had shopped at least one of nine selected retail subcategories within the prior six months (e-commerce, mass and club, luxury, jewelry, outdoor and active, department store, specialty, off price, or footwear). Based on their initial answers, participants were assigned a survey specific to one subcategory, with each subcategory receiving 1,000 responses. Survey respondents were balanced demographically across location, gender, income and age (Gen Z: 18–27, Millennial: 28–43, Gen X: 44–59, and Boomer: 60+).
The Holiday Outlook polled more than 1,000 American consumers August 6–7, 2024.
Click to download the AlixPartners 2024 Consumer Index and full list of fashion retailer rankings.