Challenge of changing consumer demands on European retailers
Retail analytics guidance system, DynamicAction, has launched its Retail Index: Spring 2019 data, providing an overview of the challenges facing European retailers as they adapt to changing consumer expectations and an evolving retail landscape.
The research, which analysed more than £9.4 billion of online global consumer transactions between 1st January - 15th April 2019, revealed an 8 per cent increase in returns in Europe compared to the same period last year, indicative of a growing trend from consumers to purchase multiple goods with the intent of returning some items. The figures also show a 3 per cent rise in free shipping, as retailers explore incentives to attract customers and remain competitive.
Another key finding was the rise of goods purchased using a short-term promotion, which was up by 29 per cent compared to the same period last year. This includes strategies such as one-day sales or site-wide promotions on seasonal items, which is increasingly seen during micro-holidays, such as Valentine’s Day.
Inventory value overall surged by a significant 56 per cent and inventory not sold fell by 7 per cent. However, the amount of inventory not viewed increased by 24 per cent, demonstrating that retailers need to improve their understanding of customer needs. Additionally, while marketing costs significantly increased for retailers in Europe – up by 74 per cent compared to the same period in 2018 – new customer acquisition was down by 10 per cent.
“Retail has changed and retailers and brands need to evolve with it. We see a consistent stream of headlines highlighting how retailers are shifting strategies with the hopes of keeping up with changing consumer expectations – from free shipping to unlimited returns. The latest findings from our Retail Index illustrate the challenges European retailers are currently facing,” commented Michael Patterson, Managing Director, EMEA at DynamicAction.
“In order to do more than survive, retailers need to strike a balance between convenience for consumers and impact to their bottom line. Data insights empower retailers to truly ascertain their customers’ needs and enable them to respond with the correct blend of inventory levels and accurate incentives to foster long-term loyalty. Going forward, the focus for C-Suites will be to prioritise customer lifetime profitability over immediate sales to ensure their efforts to match the ever increasing consumer expectations do not hinder overall profits.”