2023 was another tumultuous year as inflation, high interest rates, and general economic headwinds continued constraining consumer behavior. The past year also revealed bright spots across a variety of consumer-facing sectors, including retail, dining, advertisement and entertainment. Which of these developments are likely to shape the consumer landscape in 2024?
Find out in this January 2024 conversation between Inside.com’s Stephanie Zielinski and Placer. ai’s VP of Marketing, Ethan Chernofsky.
Q: Placer AI is a platform bursting with data and insights. Can you give us a brief overview?
A: Absolutely. Placer is all about decoding location analytics. We observe millions of mobile devices, ensuring GDPR and CCPA compliance, to unveil how people engage with retail locations daily. Through machine learning and AI, we generate comprehensive reports on trade areas, visit counts, customer journeys, and more.
Q: It’s January 2024, and the buzz around retail holidays is still echoing. What did we uncover from the 2023 holiday season, especially concerning Black Friday?
A: When it comes to retail holidays, the spotlight often falls on Black Friday. True, its relative importance has shifted due to the surge in other retail holidays, creating a more extended and competitive holiday season. Nevertheless, these holidays remain crucial for retailers, impacting each differently. For instance, Best Buy sees Black Friday as its pinnacle, but for Target and Walmart, the day before Christmas saw a surprising surge in visits, emphasizing the importance of understanding the nuances and adapting strategies.
Q: Let's talk about how we perceive the holiday season. You've mentioned viewing it not as a uniform period but as distinct stages. Could you elaborate on that?
A: We can break down the holiday season into stages—early, peak, pre-Christmas, and post-Christmas. Each stage caters to different consumer motivations. Early shoppers may seek a sense of accomplishment, having their lists ticked off. Black Friday enthusiasts crave deals and the thrill of the retail rush. Last-minute shoppers are looking for overlooked gifts, and post-holiday, we see a surge in gift card usage and returns. Retailers need to understand these motivations to tailor strategies effectively.
Q: Let's delve into the concept of value. How do you foresee the role of value in consumer behavior throughout 2024?
A: Understanding that value doesn't solely equate to lower prices is vital, and this emphasis on seeking value will likely shape retail thinking for the next six months. Value is complex and varies across consumer segments. For some, like discount stores, value presents an opportunity. For others, particularly in non-essential categories, it poses a challenge as consumers may delay purchases.
Q: Considering the evolving landscape, how do migration patterns and hybrid work arrangements influence where consumers are?
A: Migration patterns and hybrid work arrangements have left lasting imprints. The shifts in migration during the pandemic were not unidirectional—people moved both to and from urban and suburban areas. This dynamic creates new opportunities for retailers in various locations. As for hybrid work, it's still in flux, demanding a nuanced approach from retailers. Knowing where their audience is and adapting strategies accordingly is more critical than ever. Consumer shopping patterns underwent significant changes during and after the pandemic. Retailers need to identify changing consumer behaviors and adapt, rather than waiting for a return to pre-pandemic norms. Retailers must decide which behaviors to incentivize. The ability to influence consumer behavior is crucial for creating a win-win situation for both consumers and retailers.
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