US consumers price sensitivity and omnichannel expectations in Connected Retail report
CI&T, a digital transformation specialist, has released its fourth annual Connected Retail Report, revealing US consumers have heightened price-sensitivity in the wake of rising inflation and cost of living (COL) pressures, and rising omnichannel expectations of retailers.
After enduring roughly two years of inflationary pressure, consumers are feeling extra budget-conscious, looking to prices as the primary decision driver when choosing between retailers and shopping channels.
According to the CI&T report, which surveyed over 1,000 US consumers of all ages, races, and genders last quarter, 80% of consumers have changed their shopping habits due to the economy. Of those, 70% said they are spending less overall because of inflation, focusing primarily on the lowest cost items.
The purpose of the Connected Retail Report is to capture US consumers purchase preferences and shifts in buying behaviours over the last year. By uncovering key motivations along the path to purchase, the survey also supports CI&T’s separate assessment of the most exciting digital retail strategies and players delivering the best experience in the industry. Identified retailers to watch in 2024 include: Container Store, Crumbl, Dyson, Mango, Nordstrom Rack, and Zenni Optical.
The report shows that US consumers also have a strong preference for omnichannel retailers and expect good retail experiences from offline and online players, with blended operations also now strongly favoured. Key findings from the report include:
71% reported that all retailers, regardless of price, should provide an equally impressive shopping experience.
81% prefer to shop at retailers who have both online and offline channels, with price being the primary driver on where to shop. The omnichannel is here.
58% regularly use only 1-3 retailer apps. Better prices is the number one motivator for shopping via an app.
Artificial intelligence
Consumers were evenly split as to whether or not retailers should use AI to improve the retail experience, and Generative AI proved even more controversial. Over half of consumers claimed to understand what Generative AI means – of those, 67% have concerns about retailers using it.
The main AI concerns expressed included worries about retailers accessing personal information and distrust of search results. While these concerns may decline as Generative AI continues to become mainstream over time, retailers should bear in mind the importance of transparency with consumers when integrating AI technology. Good inputs, clarity and governance are a must.
“There was a consistency in responses this year that we’d never seen in years prior,” said the report’s author, Melissa Minkow, Director of Retail Strategy at CI&T. “Decisions around where to shop and which channel to leverage repeatedly came down to price, while simultaneously, there was the overarching viewpoint that lower prices shouldn’t mean lesser experience or more inconvenience.”
“The survey continues to show that omnichannel is ideal for consumers,” she added, “and there are particular use cases for each channel [in the report] that can help retailers understand the evolution of the path to purchase.”