By Chris Melore
Summer is here, but the fun may be over before it even starts! Nearly nine in 10 Americans have seen their cost of living increase over the past five years, and a new study has found that this is having a massive impact on their shopping habits, particularly online.
The poll of 2,000 U.S. adults found consumers now spend most of their money on essentials like groceries (35%), clothing (27%), and home goods (17%) when shopping online.
Over three in four (76%) believe inflation is to blame for their cost of living increases, leading 61% of consumers to shift their current online shopping habits. Commissioned by Forter and conducted by Talker Research, the study revealed that people are shopping less often (55%), buying only necessities (44%), and buying the cheapest version of the products they want (34%) to keep their costs down.
Over a third (37%) have also had to shift their travel plans for the next year due to the rising cost of living. To afford a vacation, one in 10 are cashing in their credit card points and frequent flyer miles, and 66% of them are using their points and miles more often than they did five years ago.
Researchers also found that many American consumers are changing where and how they shop in response to rising prices. Sixteen percent of Generation Z consumers shop on social media platforms — significantly more often than the national average (7%).
Forty-two percent of all respondents use Buy Now Pay Later (BNPL) often or all of the time, with Gen Z again taking the lead and using this payment method most frequently (53%). BNPL services are most often used to buy clothing (43%), home goods (34%), and to cover consumers’ most expensive monthly online expenses — groceries (20%). Interestingly, nearly one in five Gen Zers (19%) use BNPL for rideshare, compared to the national average of just seven percent.
To combat their cost of living woes, many respondents said they’d be enticed to shop online on a regular basis if companies offered some sort of perk. The most popular perk among consumers is free shipping (63%), followed by more affordability (61%), more frequent sales (36%), free and easy returns (34%), and loyalty programs (33%).
Varied and emerging payment options are also enticing to consumers, including companies that accept digital wallets (20%), those that offer buy-now-pay-later options or cryptocurrency (15%), and store credit cards (10%).
“The cost-of-living increase means that consumers are fundamentally altering their online shopping habits,” says Doriel Abrahams, principal technologist at Forter, in a statement. “Brands that want to maintain customer loyalty and value in this macro environment must evolve, too. From the simple – but important – perks to the checkout experience, consumers want more and better from their favorite brands.”
Nearly half of all respondents (48%) have considered ways to manipulate their online shopping for their benefit, including stacking coupons (50%) and reselling highly sought-after products (15%). These tactics vary across generations — 20% of Millennials consider opening multiple online accounts to receive promotions, while 24% of Gen Z consider sharing passwords to online subscriptions with friends and family.
“In light of higher prices, many consumers are cutting costs and corners,” Abrahams continues. “Brands need to strike a balance between driving business with a great customer experience and limiting the damage caused by consumer workarounds, such as abusing promotions and company policies. It’s ultimately about knowing who your good customers are.”
Survey methodology:
This random double-opt-in survey of 2,000 general population Americans was commissioned by Forter between May 14 and May 20, 2024. It was conducted by market research company Talker Research, whose team members are members of the Market Research Society (MRS) and the European Society for Opinion and Marketing Research (ESOMAR).
Source: Study Finds
Chris Melore has been a writer, researcher, editor, and producer in the New York-area since 2006. He won a local Emmy award for his work in sports television in 2011.
Image: Pixabay
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