Spotlight: Retail Revolutions

Retail Revolutions
 
Satisfaction & outlook for fashion spend

27 September 2016, by Tom Whittington

Which consumers are the most ‘satisfied’ with their local fashion offer?

 

Sentiment is a well-established barometer for how retail is expected to fare and is typically influenced by wider economic stability or uncertainty. But beyond market forces, what issues influence how consumers shop? Sentiment and fulfilment are inextricably linked. When a centre fails to provide in terms of its fashion offer, it can have an adverse impact on sentiment, or how a consumer chooses to make a purchase.

Few shoppers’ purchases are immune to income levels, even when looking at different socioeconomic groups, though the goods aspired to vary. A quarter of Baby Boomers do not consider their shopping purchases to be affected by income (compared to 7% Millennials/ Gen Y). Equally, older people feel far less constrained by financial commitments (40% unconcerned, compared to 9% Millennials/Gen Y).

However, this is not necessarily reflected in average fashion spend. Baby Boomers and their older counterparts have the lowest average spend nationally (Figure 7). At the other end of the age spectrum Gen Z and Y respondents, despite feeling the most constrained by financial commitments and income, have relatively robust average annual spend of £244 and £272 respectively. The biggest spenders, although only by a small margin, are the middle cohort aged 45-54 years.

FIGURE 7

Barometers of shopper sentiment, fulfilment and engagement by age

 
Figure 7

Source: Savills Research, Verdict

As with average spend, positive sentiment regarding future fashion spend is skewed towards the younger demographic groups. Over the next 12 months, younger people feel overwhelmingly more positive about increasing spend than older people (> 40% Millennials compared with < 20% Baby Boomers). In terms of regional distribution Millennials in London were the most optimistic with 53% anticipating increasing their spend on clothing and footwear. This has to be good news for fashion retailers targeting Gen Z and Y demographic groups should sentiment determine future spend levels.

The relatively weaker sentiment of older respondents will of course have something to do with them being more established in their general spending habits, rather than just implying a negative opinion.

Shopping is a pastime enjoyed far more by the young than the old, with 50% of the youngest group being the most positive about the pleasure of shopping, compared to 26% for those of retirement age. Yet, there would appear to be a disconnect between consumers enjoying shopping and them finding it an easy activity. Younger respondents do not appear to find it easy to access what they want, despite still highly enjoying it as an activity. Older respondents, in contrast, do not enjoy shopping although find it easy to access what they want/need.

Choice is clearly an issue. Most people view it as insufficient. Even the most connected consumers, the 16-24 year olds, influenced by social media and with the most prevalence for shopping in ‘physical’ stores, have the perception that there is not enough choice. And this is not solely a regional problem as even young people in London have this perception despite it clearly being one of the best provided markets nationally if not globally.

When shoppers are not fulfilled by their local offer they have the choice to head further afield, buy online, or in the case of 10% of the population, not shop at all.

People who shop in Stratford-upon-Avon, Solihull, Cardiff and Liverpool have some of the highest fulfilment ratings in the country, with more than 80% of consumers being satisfied with the clothing offer available to them. Northampton, Barnsley and Taunton have some of the lowest satisfaction rates (< 20%). In these towns in particular, lack of fulfilment is resulting in a greater proportion of people heading online. Different age groups respond differently when their local centres fail to meet expectations, with 30-40% of all age groups choosing to shop in another high street or shopping centre. However, when unfulfilled 55% of Millennials (Gen Y) choose to shop online, whereas 20% of Baby Boomers choose not to shop at all.

FIGURE 8

The most positive shoppers in the UK are found in:

 
Figure 8

Source: Savills Research, Verdict

Scottish shoppers are the most likely to move a purchase online, but this isn’t specifically a rural problem as there is a strong bias in respondents being from urban parts of Scotland and satisfaction levels in rural parts of the UK do not vary significantly from urban areas. However, Millennials in Scotland are the most likely to avoid shopping altogether when unfulfilled.

The consequence of low fulfilment is clear, if there is no obvious alternative within a reasonable distance, consumers will opt to buy on the internet. Where there is a good alternative, people are generally voting with their feet rather than their finger.


Spotlight on Generation Z

Who are they? The generation that follows the Millennial – born after 1995. Currently aged up to early 20s.

Why are they important? They account for a quarter of the UK population and their purchasing power will rise exponentially over the next 5 to 7 years as they grow to be the single largest group of consumers worldwide. By 2020, Generation Z will make up 40% of the population in the world’s biggest markets.

Their consumerism is defined by mobile technology, the internet and social media more than any other demographic group. They research, share information and lack loyalty towards any particular retail place, brand, or channel. They do however enjoy shopping as a social activity and despite having never known anything but an omni-channel world, they like shopping in high streets and shopping centres more than older generations.

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Key Facts

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Key Contacts

Tom Whittington

Tom Whittington

Director
Retail Research

Savills Manchester

+44 (0) 161 244 7779

 

Marie Hickey

Marie Hickey

Director
Commercial Research

Savills Margaret Street

+44 (0) 20 3320 8288

 

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