TCS Retail Survey
Retailers, Are you ready for 2023? Anticipating what’s ahead for the upcoming year is no easy task.
Consumer behavior is continuously changing, not only because of evolving digital technology, but other dynamic factors—such as inflation, lingering supply chain challenges, and geopolitical events that further muddy the industry outlook. Fortunately, the release of the TCS Retail Consumer Survey, combined with recent conversations with large retail clients, offers some data-derived insights to help retailers successfully navigate 2023.
In 2022, US retailers wrestled with a lower industry growth of 2.5%, and the forecast for 2023 is only slightly better at 3.5%, according to this report[AA1]. With margins razor thin, the question for retailers is what is your growth strategy to thrive and outpace the competition?
To shed light on consumer behavior, we launched the TCS Retail Consumer Survey in late 2022 to ask just over 1,500 US consumers about:
The technologies they are most interested in to improve their shopping experience.
The importance of sustainably-made, responsibly-sourced items when shopping.
Their plans around discretionary spending for the next few months.
Most consumers want tech-enabled shopping options
Some of the findings around technology-enabled shopping experiences were surprising. Across all genders and five generations—from Gen Z, Millennials, Gen X, Baby Boomers and the Silent Generation or Seniors— all groups (with less interest from Seniors) said they were more likely to shop with retailers offering their preferred technology.
For example, an average of 60% of all consumers surveyed say they are more likely to shop with retailers offering contactless checkout options. At 73%, Gen Zers were most likely to shop with retailers offering this technology among all age groups.
The ability to buy a brand’s products on an online marketplace was another “table stakes” technology, with well over half of all generations more likely to shop with retailers offering that capability.
One of the highest-scoring retail strategies? The ability to get rewarded for making sustainable shopping choices, with 73% of Millennials, closely followed by 71% of Gen Z, saying they are more likely to shop with retailers offering this kind of program.
Millennials and Gen Z are most likely to shop with retailers offering rewards for sustainable choices
The survey also uncovered that at 70%, Millennials were significantly more open to sharing their personal information in exchange for discounts and perks compared to the other age groups.
Sustainability-produced and ethically-sourced products
On average, most consumers surveyed say that whether an item is sustainably made or responsibly produced is an important consideration when deciding to buy, with Gen Z and Millennials most interested in making these kinds of purchases.
Perhaps most interesting? An average of 70% of all respondents say they have recently paid more for these kinds of sustainably-made and responsibly-sourced items. So, retailers will want to make sure they educate and communicate any and all corporate sustainability practices to their customers. If not, this is potentially a missed opportunity to build loyalty.
Not surprisingly, all generations are tightening their wallets.
They are planning to spend less on discretionary items (from beauty and hygiene products to entertainment, home décor, and more). But the survey findings show that Gen X, that group of people dealing with both children and aging parents, plan on spending less on these items in 2023 compared to all other ages.
Gen X expects to spend less on discretionary items in the next year compared to other age groups