Global consumer-retail gap widens amid economic & expectation changes

There is a growing disconnect between consumer expectations and the current offerings in the global retail sector, as the retail landscape is facing mounting pressure from evolving consumer expectations and economic headwinds, according to a recent global study by the IBM Institute for Business Value.

Key findings from the study indicate that only 9 per cent of consumers are content with in-store experiences, and a slightly higher 14 per cent are satisfied with online shopping. Despite a strong preference for physical stores among 73 per cent of those surveyed, the in-store experience falls short of expectations, with demands for greater product variety (37 per cent), more product information (26 per cent), and faster checkout processes (26 per cent).

Interestingly, 65 per cent of consumers are augmenting their in-store shopping with mobile apps, suggesting a trend towards a digitally integrated in-store experience. Online retail is not exempt from criticism, as consumers face challenges in finding desired products (36 per cent), inadequate product information (33 per cent), and cumbersome return processes (33 per cent), as per the study titled‘Revolutionize retail with AI everywhere: Customers won't wait’.

The study also reveals a substantial interest in AI-enhanced shopping. A majority of respondents (59 per cent) expressed a desire to use AI applications while shopping, and 55 per cent are keen on virtual assistants. However, there is a noticeable satisfaction gap in current AI assistant offerings, with only about one-third of users satisfied and nearly 20 per cent so disappointed that they are reluctant to use them again.

Economic factors, particularly inflation, significantly impact consumer behaviours. Six in ten consumers acknowledge that inflation has altered their shopping habits, with 62 per cent citing price as a primary reason for switching stores or brands. Additionally, there is a growing demand for flexible payment options, with 55 per cent of consumers desiring varied payment methods and 46 per cent interested in instalment payments.