The introduction of new tariffs this weekend is expected to negatively impact consumer spending for the holiday period, creating greater competition between retailers. A new survey by Coresight Research suggests that, to be successful this holiday season, retailers should emphasize the individual strengths of both on- and offline channels.
Coresight found that nearly six in 10 respondents were concerned about higher prices as a result of tariffs, with only one in six willing to absorb the price increases (based off an assumed 5-10% increase in prices.) Instead, consumers plan to offset higher costs by buying fewer items (25.5%), switching to cheaper retailers (22%), or opting for cheaper alternative products (22%).
“We think our survey results should sound alarm bells for retailers looking to pass on cost increases, even if those come after the holidays,” said Deborah Weinswig, CEO and founder at Coresight Research, in the report. “A majority of shoppers are unwilling to accept price hikes and will look to trade down in volume, by retailer, or by product.”
To retain shoppers, experts recommend that retailers highlight the unique benefits of each shopping experience that they offer, across various channels. Consumers were almost evenly split between shopping online (81%) and in-store (83%), with 68% expecting to buy through both. However, the reasons for choosing each channel were entirely opposite, providing an opportunity for retailers to play to each environment’s strengths.
While e-commerce is valued for saving time and effort, brick-and-mortar stores are praised for the opportunity to see goods in person, browse and make returns. Retailers who can streamline the e-commerce experience further and increase time savings will be more likely to win customers online. Stores that have a strong experiential program and dynamic opportunities to explore product will resonate with the in-store shopper.
Coresight reports that money-saving factors (special promotions, free delivery and low prices) will continue to impact where customers choose to shop, in part due to tariff concerns. Amazon and Walmart are also expected to dominate holiday shopping; 79% of consumers plan to shop from each retailer. However, smaller retailers should remain hopeful.
“Over half of those planning to buy from Amazon expect it to capture more of their budget than it did last year,” said Weinswig. “The results suggest mass merchandisers Walmart and Target stand to lose the most to Amazon, when measured by number of shoppers.”
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