RetailNext has released its monthly Retail Performance Pulse for the U.S., showing a 7.3 percent year-over-year decrease in sales on a 9.9 percent decline in traffic at physical stores for the retail month of August.
As a season, Back-to-School did not provide the lift like it had in past years, because much like Thanksgiving, today's shoppers are expanding the season both forward and backwards as they seek greater value.
"It's not a surprise to see a decline in both sales and traffic as it not only continues the well-established trend retailers have seen this year, but it also reflects the changing nature of shoppers and their new shopping journeys," said Shelley E. Kohan, vice president of retail consulting at RetailNext. "Retailers are, however, seeing a more committed shopper when she enters the store, and one who is more compelled to purchase once there. Shoppers are buying at a higher rate, measured by increases in both Conversion and Average Transaction Value (ATV)."
Other contributing factors to August's performance were a late Labor Day weekend and a dip in disposable income for apparel and other segments due to the tremendous month experienced by automobile sales. The first two weeks of August were the best performing weeks, driven in part by psychological appeal to customers of sales tax-free holidays and corresponding rises in store traffic and conversion. The last week of the month was the worst performing week.
Convenience is key for shoppers with children
The changing nature of shoppers was also described in a nationwide survey of 2,500 U.S. consumers by LoyaltyOne and Verde Group, which shows that efficient service, more so than price or product availability, is the stronger driver of store loyalty and repeat purchase decisions for shoppers at mass merchandise stores such as Walmart, Target and Staples. According to the survey, shoppers for households with kids under 18 are 19% more likely to be annoyed when retailers make insufficient information available.
Poor customer service puts back-to-school revenue at
“In today’s hyper-competitive marketplace, customer experience has assumed a major role as a key business differentiator. With families expecting to spend less this year during the back-to-school shopping period than last year, there’s a growing need to for retailers, particularly mass merchants, to address gaps in the customer experience to best capture consumer spend,” says LoyaltyOne Consulting Vice President Dennis Armbruster said.
So with August already performing worse than it has the previous years, the bespoke service gap also puts new risks on the revenue which can be created during back-to-school season. Understanding the negative impact of problem experiences on consumer spend therefore is critical for retailers. These insights can help identify the customer touch points that most impact back-to-school shoppers and proactively address them to protect consumer loyalty during the back half of the year.
Author: Daniel Stöter, iXtenso.com
