Kearney Consumer Institute Lead Katie Thomas joins Yahoo Finance Live to discuss consumer brand loyalty and the struggle consumers may encounter when shopping for certain brand names this holiday season.
KARINA MITCHELL: We're going to pivot now and turn back to the biggest shopping day of the year and bring in our next guest, Katie Thomas, lead of Kearney Consumer Institute. Thank you so much for being with us today. Really interesting notes that you sent over, and I want to explore some of them. You say, according to a recent study, consumers are a lot less loyal than we actually thought. And then you cited some numbers. Only 22% of respondents indicated they would never switch brands. 33% said they said they would switch if a competitor was on special. So, in this environment, given the inflationary conditions that we're dealing with, how careful do retailers have to be in how they attract consumers?
KATIE THOMAS: Thanks, Karina. Yeah, I think you're spot on there. And that was asked actually in relation to two brands that consumers already consider themselves loyal to. So it was actually a follow-on question of think of a brand you're loyal to and why. And then what would make you switch brands. And again, only 22% said they would never or rarely switch brands. Now, in some ways, I think that's good news for retailers because it actually indicates that there's a lot of opportunity to disrupt the consumer way of thinking.
And even with the supply chain challenges, I think we have to remember that with gifts, we're not always trying to find the absolute perfect gift, right? So if one thing is out of stock, a consumer will be willing to switch to another. Now, of course, if you're Apple or a customer that-- or a brand that customers are fiercely loyal to, it's a little trickier. But brands can really be thinking about how to build habit in the short-term and actually kind of tap into the lack of loyalty as well and just let consumers buy what's in stock.
ALEXIS CHRISTOFOROUS: You know, something else I found a little interesting here was that 74% of consumers said they would be OK if a gift arrived after the holidays. Of course, we're talking about all these supply chain disruptions. So that's a real possibility for most people. I was a little surprised to hear that.
KATIE THOMAS: I would agree. I was surprised just to see this data point come in. But I think it's a great reminder that consumers are forgiving, especially with transparency. And there has been transparency. There's been a lot of communication around the supply chain challenges that companies are having. And so they're starting to realize, I can plan accordingly. And if it's really this very important gift to me, it's more about the gift, and it's OK if it doesn't make it on the actual holiday itself. So it's another opportunity where it just provides some opportunity-- provides areas for retailers to really just communicate with consumers about when something is supposed to arrive and not necessarily panic over some of the out-of-stocks.
KARINA MITCHELL: And then do you think consumers are actually-- they're a little bit more conscientious this year. Are they looking for big deals before they shell out that money? And when they do spend, are they buying more products, or are they just spending more on what they buy?
KATIE THOMAS: Yeah, you're seeing really a mix here. And it is some of the pent-up demand we've been talking about for a while now that's finally starting to play out. So, categories such as apparel actually did really well on Black Friday because we're seeing the recovery of occasion and party apparel, as well as still folks picking up denim and other purchases that maybe they hadn't been buying throughout the year.
In other categories, consumers are a little bit willing to spend more. I think that we've seen this slow build towards experiences over things or fewer better things. And there's certainly an element of that sustainability and circularity that's coming into play here. That being said, I don't think that means you'll see a fall-off in any retail numbers this year. I think consumers are just buying a little bit more strategically. In particular, another area we've seen do well is suitcases. So suitcases, people are ready to travel and really get back out there.
ALEXIS CHRISTOFOROUS: That's really interesting that that's one of the sectors that's actually-- but they need some new-- they need some new snazzy luggage as they start to travel again. What are some areas that people are staying away from? Because I'm wondering if people are strategizing and saying, you know what? This particular item comes from far away. I'm going to have to deal with all of those supply chain issues. I'm going to switch it up and look for something else where that won't be as much of an issue.
KATIE THOMAS: Yeah, I think the areas that and the sectors that are most at risk here are actually toys and electronics because of the microchip shortage. So you are seeing a little bit of concern there. So if you haven't-- there are certain categories or products that if you haven't gotten it yet, it may not be worth trying to get it for the holiday season and just look into it in the new year.
So I can see some of that being a bigger hit industry as opposed to, again, when you think about apparel, that's really something where you can easily substitute in something else. If anything, with apparel, something that consumers are noticing a bit is the discounts aren't quite as deep. So because of the inventory challenges, particularly with organizations that have factories in Vietnam and some of those problematic locations, you're seeing them not discount as much, frankly, because they don't have to because they don't have the inventory.
KARINA MITCHELL: All right, we will have to leave it there. Katie Thomas, lead of Kearney Consumer Institute, thank you so much for your insight. We--