New Retail Localization & Agility Survey suggests consumers and retailers have mismatched perceptions of what drives apparel purchase decisions during COVID-19

SCOTTSDALE, Ariz. – Jan. 26, 2021 – New research from Blue Yonder® and Coresight Research, the Retail Localization & Agility Survey, found that 65% of retailers established or expanded their local and domestic manufacturing sources in order to gain better control of their supply chain during the COVID-19 pandemic. However, when it came to perceptions, 68% of retailers felt their consumers valued products made in the U.S. while only 19% of consumers sought out clothing/footwear made in U.S. during the pandemic, suggesting a disconnect between what retailers believe their customers want, and what actually drives a consumer’s purchase decision.  

Conducted in January 2021, the survey analyzed responses from nearly 300 senior executives in manufacturing, retail and apparel and more than 400 U.S.-based consumers, 18-years and older.

Retailers Invest in Domestic Manufacturing

Retailers are increasingly establishing or expanding their domestic manufacturing and sourcing as a result of COVID-19. This is also being driven by the desire for better quality control, shorter lead times, and better inventory management practices, as well as customer demand for American-made products.

  • Of the retail respondents that established or expanded domestic sources for manufacturing driven by COVID-19:
    • 41% expanded these operations
    • 24% established these operations
    • 17% of respondents made no changes to their strategy around manufacturing and sourcing
  • Retailers hope to achieve “better quality control” with a nearshoring strategy:
    • 34% of respondents ranked “better quality control” as the #1 benefit they hope to achieve, compared to “shorter lead times” (23%), “better inventory management” (22%), “matching product to local demand“ (14%), “reduce risk” (6%), and “tariff avoidance” (2%).

“America’s overreliance on offshore manufacturing has most recently raised concerns as we witnessed China’s overwhelming influence on our access to essential pharmaceuticals and health care goods. While the pandemic has accelerated the need for more onshoring strategies to address future crises, businesses have been trending in this direction for years,” said JoAnn Martin, vice president, Industry Strategy and Market Development, Blue Yonder. “Even before the pandemic, our customers were balancing their desire to deliver speed to market versus cost when establishing a presence in the U.S. This has largely been driven by e-commerce giants like Amazon, the advent of online shopping and the need for readily available choices, product assortment and inventory.”

Retail Localization & Agility Survey Infographic

Retailers’ Perceptions Not Matching up to Consumers’ COVID-19 Behavior

Another opportunity for retailers and brands to better align with consumer desires is on sustainability and social causes, which are increasingly informing purchasing decisions. However, today’s retailers have a different perception of what factors are driving consumers’ clothing and footwear purchase decisions during COVID-19.

  • Considerations for consumers when choosing where to purchase clothing or footwear:
    • 66% of respondents said “a retailer’s or brand’s environmental sustainability”
    • 60% of respondents said “a retailer’s or brand’s social impact”  
  • Retailers felt their consumers valued:
    • Products made in the U.S. (68%)
      • Only 19% of consumers sought out clothing/footwear made in U.S. during COVID-19
    • Promotional pricing and sales (64%)
      • Only 32% of consumers sought out the lowest price on clothing/footwear during COVID-19
    • Quick deliveries (63%)
      • Only 22% of consumers sought out the quickest online delivery on clothing/footwear due to COVID-19
    • Environmental sustainability (50%)
      • Only 17% of consumers sought out environmentally friendly or sustainable clothing/footwear during COVID-19

“As we emerge from the pandemic, a critical differentiator for companies will be building environmental sustainability and social purpose into their products. This trend will accelerate as we see consumers increasingly vote on the broader issues of the day, with their spending pose,” said Deborah Weinswig, Founder and CEO, Coresight Research.

Physical Stores Remain Attractive to Consumers Despite COVID-19 Concerns

Despite lockdowns and the indefinite store closures over the past 10 months, nearly half of consumers still prefer to shop in-store, especially for clothing and footwear. To accommodate this, retailers plan to invest heavily in technology to help keep consumers safe, like customer tracking and contactless delivery.

  • 45% of consumer respondents prefer to purchase clothing and footwear in-store, compared to 18% who prefer online shopping and 37% who prefer a mix of in-store and online
  • Retail respondents said their primary IT spending buckets for 2021 include technology for “assortment, inventory, logistics, and warehousing” (62%), “customer data analytics / loyalty programs” (47%) and “in-store tech for inventory and customer tracking” (41%)
  • As e-commerce grows as a percentage of their business, retailers are also investing in the adding of warehouse space (26%), automation technology or autonomous vehicles (29%) and flexible last-mile options like buy online, pickup in-store (BOPIS), curbside pickup, contactless delivery (26%)

Blue Yonder and Coresight Research will be showcasing the Retail Localization & Agility Survey findings during a joint webinar on Tuesday, Jan. 26 at 11 a.m. ET:  Supporting the Customer Journey: Localization for Speed to Market & Flexibility. Attendees will receive a copy of the full report. To register go here.

Research Methodology

Blue Yonder and Coresight Research collected responses via two separate surveys from 281 senior executives, 25-years and older, in manufacturing, retail and apparel firms and 451 U.S.-based consumers, 18-years and older, via a third-party provider to determine findings of its 2021 Retail Localization & Agility Survey. Both surveys were conducted between Jan. 8 to 14, 2021.

About Coresight

Coresight Research is a research and advisory firm specializing in retail and technology. Established in 2018 by leading global retail analyst Deborah Weinswig, the firm is headquartered in New York, with offices in London, Hong Kong, Shanghai, and Mangalore (India). The firm provides data-driven analysis and strategic advisory to clients including retailers, brands, enterprise technology companies, accelerators and more. In addition to being renowned for its breadth and depth of research, Coresight Research is known for its expertise in the China market, helping clients with market entry and cross-border e-commerce strategies. Coresight Research is also known for its Innovator Intelligence platform, consisting of a vast network of technology entrepreneurs that it actively cultivates through events, mentorship, and regularly updated report coverage. For more information, visit www.coresight.com.

About Blue Yonder

Blue Yonder is the world leader in digital supply chain and omni-channel commerce fulfillment. Our intelligent, end-to-end platform enables retailers, manufacturers and logistics providers to seamlessly predict, pivot and fulfill customer demand. With Blue Yonder, you can make more automated, profitable business decisions that deliver greater growth and re-imagined customer experiences. Blue Yonder – Fulfill your PotentialTM  blueyonder.com  

“Blue Yonder” is a trademark or registered trademark of Blue Yonder Group, Inc. Any trade, product or service name referenced in this document using the name “Blue Yonder” is a trademark and/or property of Blue Yonder Group, Inc.

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