3 Reasons Why Brick-and-Mortar Owned Back-to-School Shopping

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Brick-and-mortar retail has been taking its lumps in recent years. Sales are down. Companies have filed for bankruptcy. Hundreds of stores are closing. Many predictors of doom and gloom have said Amazon is taking over the world and it’s just a matter of time before online shopping takes over and in-store shopping dies a slow death.

Of course, such predictions of the demise of brick-and-mortar retail are grossly exaggerated with little data to back them up. Case in point: back-to-school shopping.

InfoScout’s proprietary mobile apps captured physical and digital receipt images of customer purchase data from back-to-school shopping occasions. We also conducted a survey of 449 back-to-school shoppers to gain even deeper insights into shopper behaviors and motivations.

This data shows that the number of shopping trips for back-to-school supplies spikes in July and peaks in August. Brick-and-mortar retail stores are the primary beneficiaries of this bump – and it wasn’t even close.

In fact, three quarters of July and August shopping trips for back-to-school supplies went to the brick-and-mortar stores of mass retailers, compared to under 5% for online shopping channels. This is a huge win for in-store shopping during the back-to-school season.

So how did mass brick-and-mortar retailers score such a decisive victory when online supposedly had all of the momentum? Here’s what the data tells us.

1) It’s Not Just About School Supplies

70% of brick-and-mortar shoppers were looking for more than school supplies. They prefer to pick up back-to-school supplies as part of a larger shopping trip. This translated to trip dollars that were nearly 50% higher than online purchases.

2) Back-to-School Shoppers Sniff Out Deals

50% of in-store shoppers visited multiple retailers. When asked why, the top seven responses involved finding the best prices and deals. While online shoppers valued the convenience of shopping when they wanted (75%) and having products shipped directly to their homes (79%), in-store shoppers looked for the best prices and were willing to comparison shop to find them.

shopping-experience-school-supplies-online

3) Brick-and-Mortar Raised the Customer Experience Bar

When asked what they appreciated about the in-store shopping experience, shoppers pointed to the ability to shop for more than back-to-school items (58%) and low prices on back-to-school items (57%). Tax-free weekends were appreciated by 17% of respondents. But the experience wasn’t all about pricing and sales.

Having a dedicated, organized section for back-to-school supplies is a plus for 49% of in-store shoppers. 47% call out the selection and availability of school supplies, while 20% appreciate that the supply lists from specific schools are available in stores.

shopping-experience-school-supplies-instore

Can Brick-and-Mortar Retailers Continue this Momentum into the Holidays?

The back-to-school shopping season demonstrates that brick-and-mortar retailers can win with low prices, dedicated back-to-school sections, effective merchandising, and well-stocked shelves. Can this approach be applied to the holiday season to slow or even stop sales losses to online channels?

For example, online channels offer the advantage of the infinite aisle. If a holiday shopper in the store is looking for a product that’s unavailable, will the retailer be willing to have that product shipped directly to the customer? While most retailers offer holiday sections for decorations, will they create special sections for gift categories, such as stocking stuffers?

Brick-and-mortar stores capitalized on the fact that back-to-school supply shopping is part of a larger shopping trip. What kinds of promotions or incentives can be offered to capitalize on this advantage during the holiday season and get more people into stores? Can stores that make  school supply lists available also support gift wish lists?

Clearly, doomsday predictions for brick-and-mortar retail stores are premature. Online can be beaten with the right combination of pricing, product availability, merchandising and marketing. The proof is in the data. Now it’s up to retailers to apply these techniques to the holiday season and beyond.

2016 Holiday Shopping Trends & Predictions, Part 2

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In the run-up to Black Friday, InfoScout’s team of researchers has been examining holiday shopping trends and has developed a number of predictions. Part 1 of our two-part blog series ran yesterday; today we share Part 2.

Our predictions for the 2016 holiday season include:

Any growth in year-over-year holiday sales will be won by Amazon – for all other retailers, the shopping season will be a zero-sum game.

Last year, the No. 1 “first stop” for Black Friday shoppers was Walmart — but running a close second was Amazon, as shoppers preferred to enjoy the leisure of shopping from home, rather than brave the crowds. InfoScout expects that trend to accelerate in 2016.

“Amazon’s share of holiday sales will grow by double digits again this year,” Schrieber said. “In fact, we expect Amazon to account for virtually all growth in retail sales, while others fight over their share of the rest of the pie.”

Voice products like Amazon Echo will have a breakthrough holiday season.

InfoScout predicts 2016 will be the Year of Voice for holiday shoppers, as products like Amazon Echo, Google Home and others in the “smart speaker” category gain awareness and rapid adoption.

“Last year was a huge win for the Amazon Fire, which dethroned the iPad as the top-selling tablet on Amazon during the holiday season. This year promises to be even bigger for the Amazon Echo; we predict it will be among the season’s hottest products,” Schrieber said.

Use of “click and collect” among shoppers will more than double.

“Click and collect” services enable people to shop online and then pick up the items at the store, giving shoppers the ability to avoid long checkout lines and shipping fees. InfoScout expects usage of “click and collect” to spike dramatically this year.

“An InfoScout survey earlier this year showed that only 34.6 percent of shoppers had used ‘click and collect’ — but of those shoppers who used it during the 2015 holiday season, a full 95 percent plan to use it again in 2016. That suggests rapid adoption is on the way,” Schrieber said.

It will be another difficult holiday season for mobile payments.

Apple Pay had a disappointing season in 2015, being used in only 2.7 percent of eligible transactions. That was down from 4.9 percent in 2014. InfoScout predicts 2016 will be even tougher for Apple Pay — especially now that top retailers including Walmart and Kohl’s have introduced their own mobile payment options.

“The challenge for mobile payment options is that shoppers don’t find them any easier or more convenient to use than credit or debit cards. Until that changes, adoption will fail to cross the chasm,” Schrieber said.

Throughout the 2016 holiday shopping season, InfoScout’s team of researchers will be analyzing real-time data from millions of omnichannel shopping trips. This data is mapped to shopper profile data, instantly triggered surveys and more to provide the richest set of shopper insights available.

Business and consumer news media interested in specific holiday shopping data and trends may send inquiries to infoscout@ideagrove.com.

2016 Holiday Shopping Trends & Predictions, Part 1

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In the run-up to Black Friday, InfoScout’s team of researchers has been examining holiday shopping trends and has developed a number of predictions for the 2016 season. Here are some things to look out for in the weeks ahead:

Super Saturday is on track to overtake Black Friday as the No. 1 shopping day of the season.

Despite retailers’ best efforts to pull holiday shopping ahead of Black Friday, consumer procrastination is actually pulling trips later into December. Super Saturday (Dec. 17) —the last Saturday before the Christmas weekend — looks to continue its recent trend of stealing share of trips from Black Friday. In 2015, Super Saturday saw 12% more trips than the prior year, while Black Friday trips remained flat.

“Black Friday has become an increasingly artificial phenomenon, driven as much by retailer promotion as by its date on the calendar,” said Jared Schrieber, InfoScout’s co-founder and CEO. “Super Saturday, by contrast, offers a more practical reason for primacy in shopping trips — it’s the last weekend to shop before the holiday.”

Being a consumer’s “first stop” is more important than ever.

A smaller concentration of sales on Black Friday means shoppers will tend to complete their trips earlier — which makes the importance of being a shopper’s first stop greater than ever. Last year, for example, InfoScout data showed that shoppers who made Walmart their first stop on Black Friday spent nearly twice as much there as those who made it their second stop. Virtually every retailer achieves a substantial “first stop” benefit (on average, an 18 percent basket size increase).

“Last year, 74 percent of Black Friday shoppers went to more than one store, and many of those went to a third and fourth,” said Schrieber. “On the other end of the spectrum, 38 percent of shoppers who went to Walmart first did not go to any other store on Black Friday. We expect the trend toward visiting fewer stores to accelerate — which makes attracting customers to your store first critically important.”

For TV buyers, it’s all about price and size in 2016, not 4K resolution or other fancy features.

InfoScout’s recent survey of 840 recent TV buyers showed that just one in five TV buyers — 21 percent — purchase the brand they intended to purchase when they walk into the store. The rest either don’t have a specific brand in mind, or change their mind after they enter the store. What’s more, product features, such as 4K resolution or Smart TV functionality, are not the differentiators brands would like them to be. Only 26 percent of TV shoppers chose a specific brand because of product features.

“When we are expecting 55-inch 4K TVs to be sold for as low as $315 on Black Friday, are consumers really buying these TVs because they have 4K resolution? Our data suggests they will be buying them because they fit their wall and their wallet,” says Bob Goodwin, InfoScout’s practice leader for consumer technology.

Look for “2016 Holiday Shopping Trends & Predictions, Part 2” on our blog tomorrow.

Throughout the 2016 holiday shopping season, InfoScout’s team of researchers will be analyzing real-time data from millions of omnichannel shopping trips. This data is mapped to shopper profile data, instantly triggered surveys and more to provide the richest set of shopper insights available.

Business and consumer news media interested in specific holiday shopping data and trends may send inquiries to infoscout@ideagrove.com.

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The Real Story Behind Macy’s Sales Declines and Store Closures, Part 2

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In the previous post, we uncovered some of the driving factors behind recent sales declines at Macy’s, one of America’s oldest and most iconic retailers. These struggles have resulted in two announcements of mass store closures within the past year.

InfoScout analyzed the shopping occasions of 12,801 Macy’s shoppers between June 2015 and June 2016, using our proprietary mobile apps to capture physical and digital receipt images of customer purchase data. We also supplemented this data by surveying 499 Macy’s shoppers to get firsthand accounts of their experiences and find out why Macy’s is losing share of wallet in its physical stores.

Our research uncovered a number of revealing facts and trends about Macy’s shoppers, which we discussed in Part 1:

  • 37% are shopping less frequently at Macy’s.
  • 32% haven’t shopped at Macy’s within the last six months, causing Macy’s to miss out on key seasonal purchase cycles.
  • The top frustration of less frequent Macy’s shoppers is high prices, cited by 50% of shoppers.
  • Other frustrations include store location (23%), customer service (15%), product selection (12%), and poor store organization and merchandising (10%).

 

Purchase data from actual Macy’s shoppers shows that the challenges facing Macy’s go deeper than “people would rather shop online.” Competition from e-commerce is certainly a challenge for all brick-and-mortar retail stores, but InfoScout data proves e-commerce is far from the only challenge that is causing Macy’s share of wallet to shrink.

Explaining Macy’s Low Share of Wallet and Where Their Customers Are Going

Of 21,776 panelists who purchased merchandise in the apparel, electronics, entertainment, health and beauty, sports, and toys categories, 15,494 purchased these products at Macy’s stores. That translates to a closure rate of 71%. But as we look further down the leakage tree, we see that Macy’s brick-and-mortar stores only own a 6% share of wallet.

If Macy’s owns 6% share of wallet, who’s getting the other 94%? The top two beneficiaries of Macy’s struggles are mass retail giants Walmart and Target at approximately 17% and 16%, respectively, followed by Best Buy (7%), Kohl’s (6%) and Costco (5%). Only 6% of purchase dollars are going to Macys.com.

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The Amazon effect is not as significant as one might expect, with the online retailer earning less than 4% share of wallet for Macy’s brick-and-mortar shoppers. However, when InfoScout analyzed the purchase data of Macy’s lapsed shoppers – those who hadn’t shopped at Macy’s in the last six months – we found that these shoppers increased their spend at Amazon by 10% after they stopped shopping at Macy’s.

While e-commerce is certainly a challenge, the data mentioned previously shows that more Macy’s customers are shopping at other brick-and-mortar stores than online. InfoScout confirmed this trend in a survey of Macy’s customers, who were asked where they have been shopping or will be most likely to shop for items that they would normally purchase at a Macy’s store.

Column Chart, Metrics Comparison, Full Width 01 Copy@2x

52% said they would turn to non-department stores such as Walmart, Target or Kohl’s, while 33% said they’ll go to other department stores such as Nordstrom, JC Penney or Neiman Marcus. 23% said they would go to apparel retailers such as Gap, H&M or Forever 21.

Of course, e-commerce is getting its fair share of business from Macy’s shoppers. 31% of survey respondents said they’ll shop at Amazon. 19% will shop at another department store website, 18% will shop at an apparel retailer website, and only 16% will go to Macys.com. This would indicate that the frustrations experienced in Macy’s stores are causing many consumers to abandon Macy’s completely, both in-store and online.

What Can Macy’s Do to Stop the Bleeding?

When shoppers were asked what would motivate them to shop at Macy’s more often, 55% said they could be swayed by easy-to-use coupons and promotions. Better product selection came in second at 15%. 10% would be encouraged by better everyday value on merchandise.

When those who claim to be shopping less at Macy’s were asked how they would feel if Macy’s closed their stores, 54% said they wouldn’t care. 41% would be sad and miss Macy’s. 5% said they would be happy and that it’s time for Macy’s to close. The sentiments of those who shop at Macy’s as often as they always have are more positive. 61% would be sad, 37% wouldn’t care, and only 2% would be happy about it.

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Clearly, the majority of frequent Macy’s shoppers are loyal to the brand, as are a large percentage of those who are shopping less frequently at Macy’s. Collectively, these customers represent a major turnaround opportunity for Macy’s.

For shoppers who are frustrated with pricing and location, offering targeted promotions and discounts for both in-store and online purchases could drive incremental purchases. Also, issues related to selection and merchandising must be addressed. While a large percentage of Macy’s customers are shopping online, not enough are shopping at Macys.com. By delivering a seamless, omni-channel experience, Macy’s can win more online dollars.

Simply attributing store closures and sales declines to the growth of e-commerce is an incomplete, oversimplified rationalization. While a 16% closure rate and 6% share of wallet are disappointing, they also represent tremendous upside for a legendary brand like Macy’s to increase those numbers. Macy’s and other retailers that are struggling with in-store performance need to dig deep into customer behavior and purchase data and adapt accordingly to retain customers and grow sales.
 
InfoScout uses proprietary technology and targeted surveys to provide valuable insights into shopper behavior, purchasing decisions and industry trends. Contact us to schedule a free demo and learn how InfoScout can help you build revenue and enhance your brand.

 

The Real Story Behind Macy’s Sales Declines and Store Closures, Part 1

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Earlier this summer, Macy’s announced that it would be closing 100 stores – about 15% of the company’s total properties – after six straight quarters of sales declines. This news follows the January announcement that Macy’s would be shutting down 40 stores. Macy’s will reportedly focus on improving the shopping experience at more successful stores and continuing to develop its omni-channel strategy.

Of course, Macy’s is not alone when it comes to closing stores. Sports Authority will soon cease to exist, and other iconic retail brands such as Walmart, Target, JC Penney, Sears and Kohl’s have been part of the recent wave of brick-and-mortar store closures.

When identifying reasons for the struggles of Macy’s, it’s easy to point to the growth of e-commerce. However, this is an oversimplification of far more complex issues. Understanding the real story behind the struggles of Macy’s requires much closer analysis of actual sales data and consumer behavior.

InfoScout used physical and digital receipt images of customer purchase data, captured by InfoScout’s proprietary mobile apps, to analyze the shopping occasions of 12,801 Macy’s shoppers between June 2015 and June 2016. We also surveyed 499 Macy’s shoppers to dig deeper into their perceptions of Macy’s and what is driving their shopping behavior.

These insights paint a fact-based picture of the problems facing Macy’s and how they are negatively affecting share of wallet for the company’s brick-and-mortar stores.

Customers Are Shopping Less Frequently

Survey data states that 63% of consumers shop at Macy’s with about the same frequency as they always have, while 37% shop less often. By tracking actual Macy’s consumer spend, we find that these shoppers last shopped at Macy’s:

  • Within the last month (11%)
  • 1-2 months ago (21%)
  • 3-6 months ago (30%)
  • 7-12 months ago (38%)

Last Macy's Shopping Trip

According to this purchase data, 38% of Macy’s shoppers haven’t shopped at Macy’s within the last six months. As a result, Macy’s is missing out on the seasonal purchase cycle that is essential to the success of any department store.

The decrease in shopping frequency can be partly attributed to the fact that most Macy’s customers aren’t shopping for other people. 74% are purchasing merchandise for themselves, with only 30% buying for their children, 26% buying for their spouse or significant other, and 24% buying for another family member.

who people are shopping for at Macy's

Price, Store Location, Selection and Merchandising Frustrate Shoppers

When asked to identify issues and frustrations experienced while shopping at Macy’s, half of those who shop less frequently at Macy’s said the prices are too high. 40% of those who shop as often as they always have also reported pricing issues. Mobile devices provide consumers with total price transparency, so when prices aren’t competitive, sales are inevitably lost.

The second biggest frustration (23% for less frequent shoppers and 15% for those shop just as frequently) is the fact that a Macy’s store isn’t close to where they live. One could reasonably deduce that these shoppers would rather shop online or at another closely located retail store than travel farther to Macy’s, especially if the prices aren’t worth the trip.

Customer service is another problem, according to 15% of less frequent shoppers. 12% are frustrated by poor product selection, saying that Macy’s doesn’t have the products or brands they want. 10% said the store isn’t well-organized or merchandised.

frustrations while shopping at Macy's

Although Macy’s prides itself on competitive pricing and product selection, purchase data from actual Macy’s shoppers clearly indicates that Macy’s is failing to deliver on this promise. When combined with customer service and merchandising issues, shoppers could easily become disillusioned and take their business elsewhere.

InfoScout data tells us that a large percentage of Macy’s customers are shopping less frequently and identifies the most common frustrations that have contributed to this trend. But what is this doing to Macy’s share of wallet? Who is benefiting from sales declines at Macy’s, and what can Macy’s do to win back those dollars? We’ll discuss these issues in detail in the next post.

InfoScout uses proprietary technology and targeted surveys to provide valuable insights into shopper behavior, purchasing decisions and industry trends. Contact us to schedule a demo and learn how InfoScout can help you build revenue and enhance your brand.

Lessons from Sports Authority, Part 2: Where Consumers and Retailers Go from Here

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In the previous post, we discussed the main reasons for the downfall of Sports Authority, which announced earlier this year that all of its stores would be closed and liquidated. While industry analysts focused on the company’s debt load, InfoScout focused on actual Sports Authority customers.

Using our proprietary mobile apps to capture receipt data and analyze more than 17,000 shopping occasions, as well as a survey of more than 300 Sports Authority customers, we discovered three core drivers behind the company’s demise – high prices, poor selection, and a failure to attract Millennials.

Now that we have a better idea of what went wrong, where will Sports Authority customers take their business? What can retailers do to earn their business?

We’ve Seen This Movie Before

Circuit City was the second largest electronics retailer in the U.S. when it began closing stores in 2008. There were three sets of open arms waiting for Circuit City customers – Walmart (the mass discount retailer), Best Buy (the largest electronics retailer), and Amazon (the emerging online retailer).

Similarly, the key players looking to fill the void left by Sports Authority are mass discount retailers Walmart, Target and Kohl’s, Dick’s Sporting Goods, which is the leading sporting goods retailer, and Amazon, which is now the dominant online retailer. All have the pricing, selection, and Millennial-desired omni-channel capabilities to avoid the pitfalls that doomed Sports Authority.

Where Do Customers Go from Here?

When customers were asked what they purchased from Sports Authority, the top product categories were athletic apparel (64%), footwear (48%) and sports equipment (45%). They were followed by sports team apparel (19%), outdoor gear (16%) and fitness items (15%).

Regardless of product category, the largest percentage of these customers (68%) will now go to other sporting goods stores such as Dick’s Sporting Goods, Academy Sports, and Cabella’s. When asked to choose just one shopping destination, Dick’s Sporting Goods, chosen by 58% of respondents, was the overwhelming winner.

This data is supported by InfoScout’s analysis of actual purchase behavior, which shows Dick’s as the most frequently shopped competitor of Sports Authority. Nearly half (46%) of Sports Authority customers will shop at Amazon, the second highest ranked retailer. Only 37% will go to mass retailers such as Walmart, Target and Kohl’s.

sports authority closing sign

Fifty-three percent of survey respondents completely or somewhat agreed with the following statement: “In about the next five years, there will be no sporting goods retail store locations left because anything you need you can just buy on the internet.” Although we don’t know how accurate consumer crystal balls are, sporting goods product categories are ripe for channel disruption.

For example, brands such as Nike are benefiting from direct-to-consumer strategies. Although Sports Authority customers are or will be shopping at Target.com (40%), Walmart.com (32%) and DicksSportingGoods.com (30%), many are also shopping at brand sites such as Nike.com (36%), UnderArmour.com (20%), Adidas.com (11%) and Lululemon.com (5%).

Customers know that they can go directly to the brand. Strong brands such as Nike have created destinations for customers, both online and in-store, and are looking to rely less upon mass retail distribution channels.

Loyals, Occasionals and Millennials

Our research found that the most loyal Sports Authority customers, those who shopped at Sports Authority at least five times in the past year, are likely to go to retailers such as Dick’s Sporting Goods and Academy Sports.

Occasional customers, those who shopped at Sports Authority fewer than five times in the past year, are shifting more spend online, making Amazon the winner for this group. However, “occasionals” are spending 6% less overall, while spending among “loyals” is down just 1%.

Digging deeper into data related to the all-important Millennials, a group that Sports Authority failed to win, our research shows that Millennial loyals are spending significantly more (23%) at both Amazon and sporting goods stores. The largest increases are at Amazon (8%).

Millennial occasionals are spending 6% less overall, but 5% more at Amazon. As a result, brick-and-mortar retailers should be asking two important questions. First, how can we capture a greater share of Millennials who were occasional Sports Authority shoppers? Second, how can we convert those Millennial occasionals into loyals?

The Final Verdict

The most loyal sporting goods shoppers value the ability to find specific items and the expertise that a specialty retailer can provide. As a result, retailers like Dick’s Sporting Goods and Academy Sports, with their established store footprints, fair pricing and ample selection, are well-positioned to benefit from Sports Authority’s loyal customers.

For more generalized needs, such as apparel and footwear, online channels are likely to continue to grow and thrive. Millennials are headed in this direction. Brick-and-mortar retailers need to deliver a consistently superior shopping experience across all channels to maintain in-store sales and avoid losing online sales to Amazon and brand sites.

Sixty-one percent of survey respondents are sad about the closing of Sports Authority. Thirty-six percent don’t care. Three percent are actually happy about it. However, all of them need alternatives. Some have already found them.

Retailers need to take a hard look at InfoScout data, assess their strategies, bring their “A” game to avoid the same fate as Sports Authority, and successfully adapt to the evolving demands and behaviors of the end consumer.

InfoScout uses proprietary technology and targeted surveys to provide valuable insights into shopper behavior, purchasing decisions and industry trends. Contact us to schedule a free demo and learn how InfoScout can help you build revenue and enhance your brand.

Lessons from Sports Authority, Part 1: What Went Wrong?

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After nearly 30 years as a sports retail powerhouse, Sports Authority will soon cease to exist. Burdened with $1.1 billion in debt, the company filed for bankruptcy protection in March. After failing to secure financial assistance, Sports Authority announced in May that all 463 of its stores would be closed and liquidated by August.

The demise of this once-great retailer begs a simple question. What went wrong?

The company admitted that it had been slow to “react to changing consumer trends.” The crushing debt that Sports Authority has carried since being purchased by a hedge fund 10 years ago surely didn’t help. Various analysts and commentators have weighed in on the matter, pointing to everything from a dull shopping experience to a lack of uniqueness.

InfoScout decided to get the real story from the people whose experiences and perceptions matter most – actual Sports Authority customers.

Using receipt images of actual customer purchase data captured by our proprietary mobile apps, we analyzed more than 17,000 Sports Authority shopping occasions during a 52-week period. We also conducted a survey of more than 300 Sports Authority shoppers.
The problem clearly wasn’t customer service, which is an easy scapegoat when things go south. 56% of survey respondents rated Sports Authority’s customer service as very good or excellent. Only a handful said customer service was fair (8%) or poor (2%).

Our research revealed three primary reasons for Sports Authority’s downfall.

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You Want Me to Pay What?

When asked to identify issues or frustrations experienced while shopping at Sports Authority, nearly half (49%) of survey respondents pointed to high prices, which was more than three times higher than the next highest contributing factor. Not only were prices deemed too high, but consumers said coupons didn’t work for the most popular brands, making them virtually useless. Unfortunately, it’s not uncommon for retailers to push out coupons and special offers without ensuring their relevance to shoppers.

Price transparency on the web allows people to compare prices in a matter of seconds. Many shoppers know what they should be paying before they walk into a store. Sports Authority failed in large part because its pricing was not competitive – and its customers knew it.

I Still Haven’t Found What I’m Looking For

30 % of respondents said they were frustrated by merchandising issues, including a lack of desired products or brands (14%), products in the right size (11%), and overall selection (5%).

The reality is that we live in an environment of a rapid convergence of channels, with limitless aisles that can be instantly accessed from our mobile devices. Failing to fully understand and deliver the correct merchandise is a fatal mistake for retailers.

The continued fragmentation of our retail environment, customer tastes and general trends makes the merchandising function more and more complex.

Missing with Millennials

Millennials now represent the largest segment of the U.S. population. According to customer data generated by InfoScout mobile apps, Sports Authority hadn’t done nearly enough to win over Millennials. Among loyal Sports Authority customers – those who shopped at Sports Authority at least five times per year – just 22% were Millennials. Gen Xers (66%) outnumbered Millennials three to one. This was a major miss that clearly had an impact on the company’s bottom line.

InfoScout data and insights clearly show us that high prices, poor selection and the failure to attract Millennials represented a three-headed monster that Sports Authority was unable to overcome. In the next post, we’ll discuss where Sports Authority’s former customers are planning to go for sporting goods and apparel and what can be done to earn their business.

Graduates Win with Aunts and Uncles


 
Graduation Season is here! The time to celebrate a lifetime of accomplishments and the beginning of a promising new stage. Parents couldn’t be prouder, Grandma is definitely going to cry, and aunts and uncles apparently get generous.

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According to one of our recent surveys, more graduation gifts are purchased for nieces and nephews than anyone else. This makes sense, especially in bigger families where people likely have have more nieces and nephews than sons or daughters. So what are they gifting?

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Graduates received mostly gift cards this year, with greeting cards and actual cash also among the popular gift-giving options. Other gifts like coffee and cars—much needed elements of adulthood—get honorable mentions. Female grads were more likely to receive flowers, while male grads were more likely to receive electronics.
 

When deciding what to gift a graduate, the number one consideration was “something that would be useful” in the next stage of their life. One curious data point also related to this decision is that uncles and aunts were more likely to ask the family and friends of the grad for gift recommendations, while mom and dad were more likely to ask the grad directly.

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Gift card purchasers are twice as likely to buy a greeting card in the same shopping trip during graduation season than during the Christmas season. The difference suggests that shoppers try to get gift and greeting cards in the same trip for graduates, while spreading the purchase of those two categories across more trips during the holiday period.

 

Another tip for all retailers out there: an overwhelming 61% of shoppers return to buy their graduation greeting cards at the same retailer where they bought their Mother’s Day card. So if you’re capturing that Mother’s Day shopper, you’re more likely to capture the graduation greeting card shopper.

 

As to which retailers people prefer for purchasing their greeting cards, the usual suspects of Walmart and Target show up on top. There is also a considerable showing from the dollar channel (Dollar Tree and Dollar General), which achieved significantly high unit sales but underperformed in dollar sales, a common trait for the channel due to its usually lower price points.

 

In summary, parents need to step up their gifting game. Spoiling uncles everywhere are going for the cash game while parents skew towards the traditionally more emotional and thoughtful greeting cards.
 
As a marketer, are you interested in knowing more about seasonal gifting in your category or other aspects of shopping behavior? Are you curious about which brands of gift cards these graduates received? Get in touch with us at contactus@infoscoutinc.com and we’ll be happy to help you out!