Why so sad? Buyers may be willing to buy more furniture, decorations than sellers think | So Good News
IMPORTANT – Retail managers have a more pessimistic view of consumers’ attitudes toward furniture and home decor purchases than consumers do, according to a First Insight/WWD survey.
The disparity between sellers and buyers also extends to overall confidence in consumers’ attitudes towards the holiday, with sellers often being more guarded about their views than consumers.
Although 40% of retail executives, for example, saw that consumers are reducing the purchase of furniture and home decorations due to high prices, only 22% of consumers said that they actually do so, a difference of 82% between the perception and reality.
Retailers were also more likely to see the rising cost of furniture and decorations as affecting consumers’ daily lives, with 17% of retailers citing it against only 11% of consumers. Overall, inflation related to home appliances was near the bottom of the list of factors affecting people. Instead, necessities like groceries, gas and restaurants topped the list.
However, buyers were more likely to name property as a place where they would lower their discretionary costs (5%) than sellers (2%). But it was very low on the list of less likely to be led by things like pet services, catering and marketing services.
In general, retail executives had a negative view of consumer behavior, and 77% believed that consumers were more concerned about the recession compared to 57% of consumers who expressed the same concern.
Retailers may also be misjudging how consumers plan to spend the rest of the year, with 58% saying consumers are more motivated by sales than they are (40%). All, however, agree that rising prices have forced consumers to stay within their budget.
“Our findings show that key decision makers are not aligned with the consumers they serve,” said CEO Greg Petro of First Insight. “The perspective of retail managers suggests a risk-reducing approach that leads to negative outcomes.”
A clear majority (94%) see a return on investment due to higher prices than consumers (79%). To combat inflation, companies said they want to increase prices (38%); load reduction (35%); moving more products (34%) increases their discount rates (29%) and increases sales and promotions (29%).
Another difference is related to online shopping, with 38% of retailers believing that people will shop online more compared to 24% of consumers who said they would. Retailers are also more likely to see shoppers shopping thrift stores, looking for cashbacks and buying more products, warehouses or stores than the average consumer.
Despite consumer evidence that e-commerce is not as important as retailers think, almost half of adults (49%) said they will spend more on e-commerce and less in stores in 2023, while 22% will do the opposite, and 29% will spend the same amount on e-comm and brick and mortar stores.
For its survey, First Insight surveyed 1,400 US executives and 65 retail executives in September and October.