Will Rising Prices Inhibit Leaders' RTO plans?
The Latest Insights from the Crowd - Rob Pace, CEO of HundredX
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is having a proprietary database of over 5 million customer experiences spanning 75 industries. The unique breadth of our database provides us the opportunity to explore the consequences that result from the impact of one industry on other industries and business strategies. It’s a rare and relevant perspective our clients value for developing actionable insights.
On the topic of leadership strategies, the discussion around employees’ return-to-office (RTO) is especially pertinent. Recently, the FT posed an interesting questio n - will rising food and gas prices impact the pace of employees’ return to office? It’s a compelling question that hasn’t been high in the mix of the top considerations for CEOs as they formulate their return to office plans. Examining our customer experience data, we think the FT is likely onto something here. As shown in the chart below, not surprisingly, across-the-board we see the impact of price impacting consumers’ decisions. This trend has rapidly accelerated over the past six months suggesting consumers are no longer feeling as confident with their financial outlook as they were during the early stages of the pandemic given unprecedented levels of government assistance.
On the topic of leadership strategies, the discussion around employees’ return-to-office (RTO) is especially pertinent. Recently, the FT posed an interesting questio n - will rising food and gas prices impact the pace of employees’ return to office? It’s a compelling question that hasn’t been high in the mix of the top considerations for CEOs as they formulate their return to office plans. Examining our customer experience data, we think the FT is likely onto something here. As shown in the chart below, not surprisingly, across-the-board we see the impact of price impacting consumers’ decisions. This trend has rapidly accelerated over the past six months suggesting consumers are no longer feeling as confident with their financial outlook as they were during the early stages of the pandemic given unprecedented levels of government assistance.
We also have seen where dissatisfaction with price can dramatically shape behavior. One of the most prominent examples we observed ahead of time was rapidly escalating concerns by consumers about Netflix price increases followed by an associated decline in customer loyalty resulting in an over $60 billion drop in market capitalization. This is particularly true when there are viable options such as in streaming.
By analogy, looking at our data on the major cost items that will impact return to office, we see that feedback on price for both gas and quick fast casual related purchases have had a dramatic downward movement during the past several months (shown below). As the FT suggest, in a tight labor market this likely suggests yet another headwind for business leaders convincing their workforces of the relative benefits of return to office. A further slowing of the RTO has additional downstream implications for the office ecosystem of businesses including owners of office space, business-focused food services providers, and industries that benefit from commuters - including segments of the auto industry. On the other hand, the at home ecosystem will likely see a corresponding benefit.
Market pressures have ripple effects – yet their impact isn’t always clear. Having access to the right data breadth is a strategic asset.
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The streaming industry has made progress but still has further to go navigating one of its biggest hurdles in years – production delays for movies and shows resulting from Hollywood writers and actors going on strike. To make up for the hole, platforms have turned to alternatives such as more international content, unscripted / reality shows and live events streaming on multiple channels simultaneously. At the same time, industry heavy hitters like Disney+, Hulu, and Netflix tweaked their prices, which annoyed customers already grappling with inflation. Viewers seemingly haven’t been satisfied with the content substitutions and plan changes, as the strikes and price adjustments seem to have contributed to a 1% dip in Usage Intent ¹,² across the streaming industry that began in May through August. It appears ending the strikes and getting new content back on the platforms needs to be a top strategic priority, particularly for Disney and Netflix, who have seen the biggest recent drops in Usage Intent. The Writers Guild (WGA) ended its strike September 27, while the Screen Actor’s Guild (SAG-AFTRA) is expected to meet with studios to find a resolution soon. The industry hopes it can next reach agreements with the actors who are still on strike soon. Analyzing more than 100,000 pieces of customer feedback across 23 video streaming services, we find:
Apparel and athleticwear retailers have seen material slowdowns in their businesses amid rising inflation and the looming resumption of student loan repayments, raising the level of debate about the health of Nike’s business heading into its Q1 2024 earnings report. Insights from “The Crowd” of real shoppers indicates Nike’s business should have seen some downward pressure in recent months but appears more resilient than most others. Despite the economic headwinds, we find Nike's direct-to-consumer (DTC) channel has bucked the trend with a modest 2% uptick in Purchase Intent ¹ , ² year-over-year in August for the Nike Store, unlike retail partners DSW and Foot Locker who are witnessing dips in both Purchase Intent and reported US sales. However, HundredX did see Purchase Intent for people under 40 dip 1% in August vs. July 2023, the first decline in over a year. This indicates demand growth is starting to crack among Gen Z and millennials, important customer groups for the sportswear company. While young adults still love the swoosh, the impending crunch on disposable income might pose a problem for Nike in the coming months. Analyzing more than 260,000 pieces of feedback across apparel, fashion, and footwear stores over the last year, including more than 20,000 on just Nike, we find:
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