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01/27/2021

Survey: Retailers misjudge consumer product priorities

Dan Berthiaume
Senior Editor, Technology
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Customers are less interested in where clothing and footwear are manufactured than retailers think. 

According to the new Retail Localization & Agility Survey from Blue Yonder and Coresight Research, 65% of retailers have established or expanded their local and domestic manufacturing sources in order to gain better control of their supply chain during the COVID-19 pandemic. 

However, when it came to perceptions, 68% of retailers felt their consumers valued products made in the U.S., while only 19% of consumers sought out clothing/footwear made in U.S. during the pandemic, suggesting a disconnect between what retailers believe their customers want and what actually drives a consumer’s purchase decision.   
 
Of the retail respondents that established or expanded domestic sources for manufacturing driven by COVID-19, 41% expanded these operations, 24% established these operations, and 17% of respondents made no changes to their strategy around manufacturing and sourcing.  

The survey also indicates retailers hope to achieve “better quality control” with a nearshoring strategy. One-third (34%) of respondents ranked “better quality control” as the number one benefit they hope to achieve, compared to “shorter lead times” (23%), “better inventory management” (22%), “matching product to local demand (14%), “reduce risk” (6%), and “tariff avoidance” (2%). 
 
More than two-thirds (68%) of retail respondents felt their consumers valued products made in the U.S., while only 19% of consumers sought out clothing/footwear made in U.S. during COVID-19. Similar misalignments occurred in the percentage of respondents saying the following considerations are important: promotional pricing and sales (64% of retailers, 32% of consumers), quick deliveries (63% of retailers, 22% of consumers), and environmental sustainability (50% of retailers, 17% of consumers). 
  
Despite lockdowns and the indefinite store closures over the past 10 months, nearly half of consumers (45%) still prefer to shop in-store, especially for clothing and footwear. Fewer than one in five (18%) prefer online shopping and 37% prefer a mix of in-store and online.

To accommodate this, retail respondents said their primary IT spending buckets for 2021 include technology for “assortment, inventory, logistics, and warehousing” (62%), “customer data analytics/loyalty programs” (47%) and “in-store tech for inventory and customer tracking” (41%). Retailers are also investing in the adding of warehouse space (26%), automation technology or autonomous vehicles (29%) and flexible last-mile options like buy online, pickup in-store (BOPIS), curbside pickup and contactless delivery (26%) 
 
Blue Yonder and Coresight Research collected responses via two separate surveys from 281 senior executives, 25 years and older, in manufacturing, retail and apparel firms; and 451 U.S.-based consumers, 18 years and older, via a third-party provider.