NPD Talk at Nationwide PrimeTime Addresses Battle for Buyers’ Dollars
Nationwide Marketing Group's PrimeTime "No Limits"-themed convention kicked off this week with a keynote Sunday at the Las-Vegas-held event that zeroed in on overarching trends on the retail landscape, through a research-rooted presentation by Perry James, president, U.S. Hardlines at The NPD Group.
Consumer needs driving overall sales growth include health and wellness, stay-at-home entertaining, convenience, and owning products with multi-functionality, NPD has found.
With that said, James added, consumers are more and more tethered these days to “committed consumption,” meaning spending earmarked to subscriptions and other inflexible and recurring payments, which makes vying for their leftover disposable income a challenge. But they are also more willing to spend much more for products they want, which has made for disruption in recent years with the rise of premium product sales in categories as diverse as headphones and major appliances.
James added that despite the fact that 37 percent of consumer electronics are currently sold online, consumers are still receptive to a positive in-store experience – a fact that independents have known forever but one that is now being discovered – and mined, to some degree – even by big-box retailers, who have begun to chip away at e-commerce seller incursions on their business. “Best Buy,” he noted, “is using in-store experiences and price-matching to steal share from Amazon.”
In his remarks, James also emphasized certain consumer groups who bear close watching and cultivation by independent retailers – namely, Millennials, a demographic that believes “big is bad” and as a result, is not that predisposed toward buying from big-box retailers. He also noted the importance of paying attention to Baby Boomers, who will need independent retailers’ services in greater numbers as they downsize their homes and relocate.
Although Amazon reaches 55 percent of the population with its Prime programs – a daunting stat – James gave one interesting example of how brick-and-mortar retailers are leveraging Amazon’s dominance to serve their own purposes, citing Kohl's’ limited experiment of accepting Amazon returns at some of their stores – which generates foot traffic for Kohl's.
Another notable trend James cited that is worthy of attention by independents included the progression in uptake among consumers of connected-home products, with 16.5 million households owning at least one home automation product – up 43 percent between 2017 and 2018. It’s a category that begs attention, as consumer become more comfortable with “smart.” And it’s an area with considerable upside, as traditional categories like mattresses are being disrupted with trends such as direct-to-consumer sales.
As challenges continue to present for the brick-and-mortar independent, James said, service becomes an ever-more crucial factor in survival – which means keeping abreast of the technology of retail, to ensure a “frictionless sale,” as he phrased it, for the consumer.