TCS Retail Consumer Survey
Surprising opportunities await retailers in 2023 despite forecasts of a challenging economic cycle and decreased consumer discretionary spending.
Industry
Retail
Omnichannel CX and Intelligent Innovation – The Future of Retail
Highlights
- The cross-generational TCS Retail Consumer Survey offers key insights that can help retailers understand consumers better and successfully navigate 2023.
- Our study reveals what’s most important to customers for an enhanced shopping experience along with new opportunities for retailers.
- The highest-scoring retail strategies? Tech-enabled shopping options, sustainable shopping choices, and building loyalty with rewards for sustainable choices.
In this article
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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.
Intriguing insights
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.
Consumers prefer contact-less check-outs.
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
Choosing brands that reward 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 matters
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.
Sustainability matters to most consumers
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.
Discretionary spending
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
Gen X is most cautious about spending on discretionary items.
Intelligent investments for the future
Retailers need to capitalize on Millennials’ open-mindedness to engaging in unique shopping experiences and potentially building stronger, longer relationships.
They need to nurture trust with Gen Z and the other generations, each of which have their own unique preferences when it comes to shopping.
As consumers tighten their wallets in today’s economy, retailers will want to make intelligent investments, building on a holistic growth strategy and relying on data and insights and expertise about the technologies that will bring the best return on investment for the short and long term.
The good news is that with the right strategy in place, brands have a chance to turn this period into an opportunity to build loyalty, trust, and even excitement with shoppers. Those who will win are ones who can creatively help their customers make sustainable choices, live up to their values, and ultimately make them feel good about shopping with them.
