Retailers’ Brick-and-Mortar Worries Out of Whack with Consumer Concerns

July 19, 2017

A survey of retail executives by Retail Systems Research found an increased concern among retailers about consumer price sensitivity. But focusing on price, RSR argued, will not overcome the challenge of competing with Amazon.

The online survey covered 1,266 retailers worldwide, 87% of them headquartered in the US. Asked about their three top challenges, 55% cited “consumer price sensitivity,” making it the most commonly mentioned problem.

That 55% level was up somewhat from the previous year, when 50% of the executives cited price sensitivity as a top challenge.

But the focus on pricing is off the mark—by a wide margin—the authors of the report argued, calling it “shocking” that retailers appeared to be less concerned about in-store service, competitive differentiation and customer dissatisfaction.

“Price is simply not an adequate lever to drive demand,” wrote RSR’s Paula Rosenblum and Steve Rowen.

Retailers’ concerns about price sensitivity are doubtless based on real pressures exerted by industry giants Amazon and Walmart, but the focus on pricing as an in-store challenge doesn’t necessarily align with consumers’ attitudes about the experience of brick-and-mortar shopping.

For example, a February 2017 survey by payments platform Adyen identified three key criticisms consumers make about in-store shopping. The most widely cited complaint was lines. More than three-quarters said they leave stores because of long lines. Nearly half said they didn’t want to interact with salespeople, and the same percentage expressed reservations about feeling pressured to make a purchase in the store.

Meanwhile, an International Council of Shopping Centers (ICSC) survey released in March showed that more than three-fifths of consumers expect that by 2020 they will prefer to be left alone to do their own thing while in stores instead of engaging with a sales person.

In the RSR survey, concerns about customer complaints over in-store service were cited as a top challenge by 39% of the respondents.

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