At at time of rising sensitivities around diversity and inclusion, retail executives may be misjudging their impact on shopping decisions.
According to a new report by First Insight, 92% of senior retail executives surveyed felt that consumers would continue to buy from their company even if they created and offered a controversial and offensive product if they pulled it from the shelves quickly and issued a public apology. But only 27% of consumers responded that they wouldn’t mind and would continue shopping at that retailer. And 19% said they would stop shopping at that retailer or brand forever, versus the 5% predicted by senior retail leaders.
When asked about the importance of diversity factors when choosing which retailers or brands to shop, only 61% consumers felt extended sizing was important, versus 82% of senior retail leaders. Similarly, only 44% of consumers felt brand influencers representing diverse viewpoints were important, versus 77% of senior retail leaders.
“According to the results of this survey, consumers may be more understanding and forgiving of retailers as they ramp to meet rising inclusivity and diversity expectations than previously anticipated by most senior retail leaders,” said Greg Petro, CEO of First Insight. “Rome wasn’t built in a day, and as retailers and brands continue to work to align with new expectations of today’s consumer, whether it’s through extended sizing, cultural inclusion, hiring a chief diversity officer, or responding to and learning from mis-steps, retailers need to continue to be sensitive to the needs of the consumer.”
The data also shows that senior leaders need to stay invested in their day-to-day operations, and stay connected with the voice of customers on quality and pricing of items, added Petro. For example, 50% of consumers surveyed believe prices of products online are increasing. But only 38% of senior retail leaders answered the same. Also, 60% of consumers felt that in-store prices were increasing, compared to only 35% of senior retail leaders.
Other significant findings of the survey include:
- Both consumers and senior retail leaders agreed on the importance of women and minorities in senior leadership positions (50% versus 54%, respectively). But 75% of senior retail leaders said they do not plan to hire a chief diversity officer compared to 54% of consumers who felt it would benefit them.
- Cultural inclusivity which includes modest styles, hijabs and head coverings was ranked the least important diversity factor impacting shopping behavior by both groups. But it was more important to consumers (46%) than to senior retail leaders (38%).
- There remains a large disconnect between senior retail leaders and consumers on the impact of pricing on purchase decisions. While quality remained the most important factor for both senior retail leaders (48%) and consumers (51%), 40% consumer respondents ranked low price of a product as important, versus only 23% of senior retail leaders. Of note, 23% of senior retail leaders ranked convenience as important, with only 7% of consumers ranking it as important.
First Insight’s findings are based on two separate surveys. The consumer survey was based on targeted samples of more than 1,000 respondents and was fielded in September of 2019. It was completed through proprietary sample sources amongst panels who participate in online surveys. The executive survey was based on a sample of 48 retail senior-level business executives (C-suite, EVP/SVP, Vice President and Director roles), and was conducted in September and October 2019.