Top retailers during the holidays are chosen by consumers, with Nike and Kohl's leading the way.

• According to a consumer sentiment study by AlixPartners, Nike and Kohl's remain the top choices among consumers for athletic footwear and department stores.
• To remain popular among consumers, the sneaker giant and legacy department store must act swiftly to reverse their declining sales.
• To win consumer dollars this holiday shopping season, retailers must improve their inventory management, according to Alix's report.

Despite not performing well on Wall Street, consumers still view them as the best in their respective categories, according to a recent consumer sentiment survey.

AlixPartners' Consumer Sentiment Index surveyed 9,000 fashion shoppers across different generations to determine the factors influencing their purchasing decisions and how retailers compare to their competitors.

Nike was the top active footwear retailer among all four generational cohorts surveyed, including Gen Z, millennials, Gen X, and boomers. Nike outperformed its competitors, including Adidas and Under Armour, which tied for second place. On Running, a newer competitor, finished last among Gen Z and millennials.

Gen Z and boomers preferred Kohl's as their top department store choice, while millennials opted for and Gen X selected .

The survey's results differ from Nike and Kohl's recent sales projections. While Nike anticipates a 8% to 10% decline in sales this quarter, Kohl's expects to see a 5% increase. As of Wednesday's close, Nike's stock has fallen 26% this year, while Kohl's has risen 12%.

Kohl's anticipates a decline in sales of 4% to 6% this fiscal year as it faces existential challenges that department stores are encountering in staying relevant. The company's stock has fallen 32% so far this year, as of Wednesday's closing.

According to Sonia Lapinsky, head of AlixPartners' global fashion practice and the report's author, the survey's findings, when compared to the companies' recent performance, suggest that Nike and Kohl's are at a critical juncture. Despite consumers' continued support for the retailers, the results indicate that goodwill could quickly dissipate if the companies do not promptly identify and address the issues at hand.

According to Lapinsky, the Nike consumer's preferences can be determined from the data. The focus is on innovation, technical quality, product development, and the competitors who are rapidly expanding. These competitors are renowned for their innovation and quick product development, which sets them apart from Nike.

Kohl's has won consumers with competitive prices despite frequently changing its assortment strategy over the years.

Although consumers believe they are getting the best deal with product price combinations, they still love Kohl's bucks. To increase sales, it is essential to enhance the in-store experience and make it a reason for customers to return.

Walking the inventory tight rope

Alix's consumer sentiment report unveiled several important findings for retailers to consider during the holiday shopping season, including the top factor that would motivate shoppers to switch to a competitor. Specifically, 66% of surveyed consumers indicated that they would choose to shop at a different retailer if the product they desired was out of stock.

The report stated that although the phrase "right product, right place, right time" is commonly heard in retail conference rooms, it has become increasingly difficult for retailers to avoid frustrating shoppers when they cannot find their desired size or item online.

On average, only 9% of a retailer's online assortment is available in stores, according to a report based on a sample set of 30 retailers.

"The discrepancy between the number of women's tops available online and in-store is causing frustration among consumers, with 158 tops and tees available online but only 50 available for pick-up in the Herald Square location."

While retailers are expanding their digital offerings to attract online customers, consumers expect to find the same products in-store when they return.

To ensure that consumers can find what they're looking for in stores, retailers need to forecast which inventory to put where, rather than replicating digital inventories.

"According to Lapinsky, AI should play a crucial role in this recipe by becoming smarter about predicting customer needs and preferences. This can be achieved through advanced analytics and AI models. Additionally, AI should be used to understand consumer behavior at a store level, such as by store location, cluster, or region, to provide a better shopping experience."