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1、W H I T E PA P E RUnderstanding Consumer Behavior in Retail:Factors Driving Preference,Social and Political Issues,and Shopping Channel ExpectationsIntroductionConsumer Trends Re-shaping Your Brands PositioningWhat Consumers WantConsumer Trends in Shopping Channels 1.Shopping In-Store is Still Alive
2、 2.Consumer Preferences in Online Shopping 3.Why Some Retailers are Preferred 4.Retailers Addressing Social and Political IssuesWatching the Consumer TrendsHow Fuel Cycle Can Help03040405050608091112Table of contentsUnderstanding Consumer Behavior in Retail3The strength of every business comes down
3、to the decisions it makes.But sometimes those decisions rely on outdated data or,even worse,no data at all.To avoid this situation,businesses may be eager to implement market research solutions.The problem with these solutions is theyre daunting,and usually come with a considerable commitment of tim
4、e and money.Thats especially difficult when consumer sentiment shifts rapidly,as it has since 2020.Tech-nology and trends are changing how consumers feel about retail brands.The pandemic forced rapid adaptation of contactless buying solutions while stirring up supply chain issues and economic turmoi
5、l.The result?Consumers are weighing their decisions at home,becoming more conscious about where and how they spend their money.If retail companies can find a way to get the data they need to identify what todays consumers are thinking,a potential shift in consumer sentiment can work to their advanta
6、ge.Welspun is a Fuel Cycle client and conglomerate with diverse businesses in line pipes,textiles,infrastructure,and steel.Their home textile division partnered with Fuel Cycle to gather important informa-tion for their clients who are retailers.The study consisted of 1,005 retail consumers between
7、February 22nd and March 15th,2023.This White Paper will dive in to the key takeaways from the survey data and address consumer shopping trends that might impact your business.Understanding Consumer Behavior in Retail4What do consumers want?Asking what consumers want is the wrong question.The truth i
8、s,a concept like what consumers want is ever-changing.Your current data only gives you a snapshot of what consumers want at that moment in time.But if you identify enough trends over time,you can place those snapshots together into a cohesive narrative of your customers needs.Todays consumers want a
9、 few things simultaneously.As well explore in the following data points,consumers love a good,frictionless shopping experience.If they can place an order and the product instantly appears in their hands,all the better.Depending on what consumers are shopping for(groceries and clothes,for example),th
10、eyre happy to visit the store.But as Gen Zs purchasing power continues to grow,consumers will also be looking for speedy and efficient delivery to their doorstep.Fuel Cycle and Welspun identified consumer trendssometimes surprising,sometimes expectedthat can hint at where your brands best opportunit
11、ies may be.Lets take a closer look.Consumer Trends Re-shaping Your Brands PositioningUnderstanding Consumer Behavior in Retail5Consumer Trends in Shopping ChannelsConsumers are still happy to show up in-storeparticularly for groceries and clothing items.37%of respondents said they shop in-store 2-5
12、times per week.Additionally,when talking about individual retailers,customers tended to paint a more positive picture of the in-person shopping experience than their online experience.For example,Target saw a 67%approval for its in-store experience compared to 63%approval for online shopping.01Shopp
13、ing In-Store is Still AliveShopping Channels Used Per Retailer84%86%91%75%84%86%92%69%79%86%87%80%86%TargetWalmartCostco WholesaleBJs Wholesale*Home DepotLowesTJXMacysKohlsBurlingtonKrogerMeijer*Big Lots42%40%30%20%34%21%16%52%41%16%19%23%15%Shop in-storeRetailerShop online and have it shipped to yo
14、ur home37%44%24%51%36%31%14%31%31%13%34%18%16%Shop online and pick up in-storesIndicates retailer is a top 3 performer in that shopping channelBase:Target(n=255),Walmart(n=252),Costco(n=249),BJs(n=79),Home Depot(n=250),Lowes(n=248),TJX(n=249),Macys(n=233),Kohls(n=240),Burlington(n=142),Kroger(n=223)
15、,Meijer(n=65),Big Lots(n=183),Q.In which way(s)have you shopped at RETAILER in the past 6 months?Please select all that apply.EXCLUDES AMAZON AND WAYFAIR Asterisk(*)indicates base is under 100nThe data from the survey broke down the shopping channel preferences for specific retail companies to ident
16、ify whether the preferences were driven by brand preferences.(Note:Since Amazon and Wayfair only offer online shopping,they werent included in this data).Given the choice,many customers still preferred the in-person experience.However,this doesnt mean consumer love for online shopping has abated.Abo
17、ut 70%of consumers shop in-store anywhere from 1 to 5 times per week.But zoom out from once a week to once every month,and online shopping becomes the most frequently-preferred channel.This speaks to the ubiquity of online shopping.It also hints at the possibility that while shopping in-store is sti
18、ll alive,the online experience is a determining factor for many customers when they make their buying decisions.Understanding Consumer Behavior in Retail6None of the above is meant to suggest consumers always prefer in-person shopping.The data suggests that consumers have strong opinions about the o
19、nline shopping experience.Online shopping preferences are unique,suggesting that your investments in speed and convenience will pay dividends with retail customers.02Consumer Preferences in Online ShoppingOne of the most relevant findings is that 8 out of 10 shoppers find free shipping to be the mos
20、t important feature of online shopping,followed by speed of delivery and an easy return process.In short,online shoppers go online when they want convenienceand theyre most pleased when thats exactly what the experience brings.Of those who ranked these important,they also stressed just how important
21、 it was:“very important”was a common answer,at about 40%for free shipping and speed of delivery.At home,customers can sit back,do the research,and run the numbersoftentimes across multiple brands and retail outlets.A simple change like free shipping can be the make-or-break difference in their buyin
22、g decision.Not important at allNot very importantSomewhat importantVery importantExtremely ImportantImportance of Online Shopping AspectsFree shippingSpeed of deliveryEasy return processLength of time to return itemVariety of pick-up options1%3%15%40%41%1%3%22%42%32%2%5%21%42%31%2%10%35%34%18%5%14%3
23、3%29%19%81%74%73%52%48%T2BBase:Total N=981 Q.Please rate the importance of these aspects of online shoppingSurprisingly,a lack of pickup options didnt matter quite as much to customers in these ratings.Customers rated“variety of pickup options”as“not very important”at a rate of 14%,far more than the
24、 5%for rating the“early return process”answer.Additionally,customers werent quite as concerned about how long it took to return items.Of course,not all consumer trends are uniform across all age groups.For example,the data showed that free shipping is more likely a priority for middle-aged and older
25、 consumers.86%of people aged 55 and above ranked free shipping as important,while only 76%of those aged 18-34 ranked the same.Meanwhile,younger consumers were more likely to prefer conve-niences like the speed of delivery.Understanding Consumer Behavior in Retail7Interestingly,the oldest group(55+)h
26、ad the largest extremes:they placed free shipping at the highest overall importance,but only 34%of people aged 55+ranked“variety of pick-up options”as important,by far the lowest of the entire list.This suggests if you have an older market segment to target for your online retail sales,your primary
27、focus should be creating free shipping options,but not expanding pickup options with online orders.TotalAges 18-34(A)Ages 35-34(B)Ages 55+(C)Importance of Online Shopping Aspects(Top 2 Box)by Age GroupFree shippingSpeed of deliveryEasy return processLength of timeto return itemVariety ofpick-up opti
28、ons81%76%83%86%74%76%80%61%73%67%78%73%52%49%58%48%48%49%55%34%AACCAACCCBase:Total N=981,Ages 18-34 N=350,Ages 35-54 N=398,Ages 55+N=233 Q.Please rate the importance of these aspects of online shopping.Letter represents statistical significance with the group at 95%confidenceUnderstanding Consumer B
29、ehavior in Retail8When looking at favorite retailers,the data identifies a clear winner:Amazon won,at a rate of 9/10.Walmart and Target werent far behind.Considering these are some of the favorites among retail consumers,these findings werent a big surprise.But theres also an opportunity for improve
30、ment in the world of retail:almost all of the retail brands scored relatively low in 03Why Some Retailers are Preferredcustomer service.Respondents rated Costco the highest in customer service,as well as one of the favorite overall retailers.A high correlation between customer service and brand perc
31、ep-tion is key.It means that winning a reputation for great customer service reflects well on your whole company.The study also looked at retail ratings broken down demographically and found there were some strong preferences.For example,African-Americans preferred Walmart,as did the South as a whol
32、e.Meanwhile,northeast and Midwest consumers werent as high on Walmart.Those regions expressed some fondness for Wayfair and Kohls over other groups.What drove customers to rate these retailers as their favorites?Individual reasons were all over the map.“Low everyday prices and convenient location”wa
33、s one for Walmart,while“Target has such a variety of products to choose from and always something new”came in for Target.AmazonWalmartTargetHome DepotKohlsTJXLowesCostco WholesaleMacysKrogerBig LotsBurlingtonWayfairBJs WholesaleMeijer90%81%66%36%30%30%30%29%26%24%19%14%9%8%7%Base:Total N=1005 Q.Plea
34、se carefully look through this list of retailers.Select your top 5 favorite retailers.Favorite RetailersUnderstanding Consumer Behavior in Retail9The survey questions didnt only focus on retailers and the shopping experience.They also probed deeper into consumer values to learn what issues were the
35、most important to people.Here were the top five results,along with some of the age groups that stood out:04Retailers AddressingSocial and Political Issues Supporting USA products(typically important to older/middle-aged consumers)Womens rights(important to younger consumers)Disability equal rights R
36、acial equality and justice Supporting veterans(more important to older customers)Not important at allNot very importantSomewhat importantVery importantExtremely ImportantImportance of Political and Social InitiativesSupporting veteransDisability equal rightsSupporting products made in USAWomens righ
37、tsRacial equity,justice and inclusionSustainability/Environmentally consciousFair trade and ethical manufacturingCommunity-level/Local initiativesGun ownership rightsBody inclusivityLGBTQ+equal rights4%4%12%31%49%4%3%14%30%49%4%4%15%37%40%5%5%14%28%48%7%5%13%26%49%6%6%15%36%38%4%5%18%38%35%3%5%23%30
38、%49%13%8%20%27%32%7%8%28%30%27%16%8%22%27%27%80%79%77%76%75%73%73%69%59%57%54%T2BBase:Total N=1005 Q.How important are each of these initiatives to you?Surprisingly,hot-button issues like gun ownership and LGTBQ+equal rights received lower ratings than the ones listed above.That isnt to say customer
39、s ignored themgun ownership rights,for example,had a 32%“very important”rating.But on the scale,it was dwarfed by issues like disability equal rights(49%“very important”)and supporting veterans(49%“very important”).Understanding Consumer Behavior in Retail10Age played a role here,too,but it wasnt th
40、e single driving factor behind which issues mattered the most to customers.For example,supporting veterans scored the highest with ages 55+,but was still rated important by at least 76%of people ages 18-34.The more polarizing issues scored the lowest,such as body inclusivity(40%for ages 55+vs.63%for
41、 18-34)and LGBTQ+rights(41%vs.60%).Most consumers did not have very strong or polarized views about what a retailers social initiatives should be.For example,“community initiatives”scored relatively low thanks to 23%“neither unimportant nor important”responses and 43%“somewhat important”responses.An
42、other reason polarizing social issues didnt seem to move the needle:not everybody changed their shopping behaviors based on their political preferences.Both middle and high-income earners were likely to change their buying preferences based on these issues.But lower-in-come respondents had other pri
43、orities in mind,like product value.Overall,younger consumers wanted retailers to support initiatives they care about.In fact,they may also be willing to boycott retailers who dont support the issues they care about.This led to a trend of younger and middle-aged consumers being more likely to boycott
44、 specific brands based on their social beliefs.Ages 18-34(A)Ages 35-54(B)Ages 55+Importance of Political and Social Initiatives(Top 2 Box)By Age GroupsSupporting veteransDisability equal rightsSupporting products made in USAWomens rightsRacial equity,justice and inclusionSustainability/Environmental
45、ly consciousFair trade and ethical manufacturingCommunity-level/Local initiativesGun ownership rightsBody inclusivityLGBTQ+equal rights74%81%A86%A80%81%75%66%82%A83%A79%C78%C69%81%C77%C63%77%C76%C64%72%78%AC67%79%72%C62%60%59%56%63%C60%C40%60%C56%C41%Understanding Consumer Behavior in Retail11If you
46、 have strong data,you can identify consumer trends and opportunities for smaller brands to break in and compete with the larger brands.Fuel Cycle and Welspuns survey of over 1,000 retail shoppers found that consumers shop retailers most frequently in-store,even though they have all sorts of channels
47、 like buy-online,pickup-in-store or online shopping outright.Consumers love the in-store experience,especially in the years after COVID,and typically prefer it when retailers offer both online and in-store shopping.However,the online experience pleases customers most when free shipping and fast,prom
48、pt delivery are available.Consumers also prefer retailers with valueespecially if you have a large selection to choose from.Amazons options and conveniences make it the most favored retailer in the country,as well as a preferred retailer across multiple demographics.It often ranks highest in the onl
49、ine experience,product selection,convenience,consistency,and value.However,there is one place todays brands can always compete:customer service.Top retailers customer service options werent favored nearly across the board.Social and political initiatives most important to consumers include supportin
50、g veterans,disability equal rights,shopping USA-based manufacturing,womens rights,and racial equality.But consumers dont always dictate their shopping habits based on these initiatives.Watching the Consumer TrendsUnderstanding Consumer Behavior in Retail12If you feel like youre just catching up to t
51、he data,or that you need to identify trends like buying USA-made products,still enjoying the in-person shopping experience,and placing their online shopping priorities in shipping and convenience,Fuel Cycle can help.Fuel Cycle Solutions will give you the actionable business intelligence to cut throu
52、gh the noise and dial deep into what customers are really thinking.It eliminates guesswork and gives you simple data to work fromdata that can help you position your brand to align with the values of todays consumers.You can enable your teams to do more by continuously engaging with customers and delivering actionable intelligence.Contact us to learn more about Fuel Cycles suite of solutions that will take your brand to the next level.Contact Our ExpertsHow Fuel Cycle Can Help