Having to tread water at best during the pandemic, US consumers are again facing challenges impacting millions of their lives. The retail industry which accounts for 70% of U.S. economic activity and a very large portion of U.S. employment is being stressed by rising inflation and supply disruptions. A newly published report by Signifyd provides insight as to how these challenges are impacting consumer behavior and the ways retailers can respond.
The report advocates for retailers to embrace innovation and identify new strategies in the post-COVID normal. A survey by market researcher OnePoll was conducted as part of the report, revealing key data about consumers:
- 62% of US consumers overall say inflation and supply disruptions have caused them to reduce their spending,
- 66% cut back on spending in 2022 due to persistent inflation,
- two thirds of shoppers were affected by supply chain problems, and
- 58% were impacted by shipping disruptions in term of timeliness and speed of delivery, once they were able to obtain their desired purchase.
Insight from retail experts such as FIS, LOOP and others was included in the report, assessing challenges and trends occurring in the retail industry in four key areas:
- The transformation of online payments,
- The online returns reckoning,
- The need for fulfillment diversity, and
- The rise and evolution of online marketplaces.
The experts focused on ways that merchants and brands can bolster their performances to achieve further growth despite these new challenges.
Having experienced a 33% growth rate in ecommerce for 2021 at the height of the pandemic, the retail industry must now adjust to the slowing of online sales as consumers emerge from lockdowns and other constraints. While consumers adjusted to the pandemic by moving to ecommerce—forcing retailers to pivot—post-pandemic consumer buying habits that have permanently been changed is presenting another challenge to retailers that they must meet,
These two new challenges, inflation and supply disruptions, have made consumers more cautious and conservative in their spending. Signifyd CEO Raj Ramanand addressed this new period, “Retailers and brands need to stabilize their operating costs while optimizing their conversions and revenue given today’s economic challenges”.
Ramanand sees a new of era of ecommerce emerging that requires retailers to offer “a best-in-class customer experience” as paramount. As retailers and brands seek more solid ground, establishing the right customer experience is critical and it begins with the consumers arrival to a digital site and completes with their purchases.
Ramanand’s advice aligns with the OnePoll survey that found that 30% of surveyed consumers gave their online shopping experiences as “poor.” Accordingly, retailers have much to do.
Another area flushed out in the report exposes more about consumer behavior and attitudes. A significant number of consumers revealed that they are willing to break the rules to take advantage of retailers and their policies—with over 20% admitting to “lying or otherwise being dishonest when requesting a refund”.
Those findings bolster the need for “better payments, intelligent returns, diverse fulfillment options and marketplace strategies.”
With so much in flux, retailers gain much needed insight from this report—including emphasis by industry experts that retailers pursue innovation and new strategies to address these current challenges, as well as new consumer behavior that is emerging in a post-pandemic new “normal” world.
The poll was conducted with 1,005 online consumers in the U.S in June, 2022.
