Consumers Ready To Spend — Well, Maybe
In difficult economic times, marketers may expect to see consumers do less shopping. Some consumers are pulling back and many are changing habits, but some are not. Recent studies from Morning Consult and Coveo found that a lot depends on the products and the consumer’s generation — apart from rising prices on many items.
Retail sales rose 0.3% in August — better than expected, but boosted mostly by a big leap in major purchases like motor vehicles and parts, the Census Bureau reported Thursday.
The consumer price index rose 0.1% in August, after remaining flat in July compared with the prior month, prompting some consumers to make tradeoffs for holiday gifts and gatherings. Some 64% plan to take a more conservative approach to spending, according to Morning Consult data released Thursday. The majority, 82%, will search for better deals and discounts, and 72% will look for less expensive alternatives.
Morning Consult also suggests 36% of consumers plan to do their holiday shopping mostly online, down 11% from the 47% who said the same in 2020. Nearly half, 49%, plan to spend the same amount as last year overall and on gifts, with spend forecasts nearly identical to September 2021.
Consumers across generations have different motivations for shopping online as well as choosing specific products — ranging from sustainability to price, a study by Coveo found when surveying 4,000 consumers in July to get a pulse on shopper sentiments heading into the holiday shopping season.
Coveo released its 2022 Holiday Shopping Report, Spending Trends and Impact today. When consumers were asked about the brands they might buy in 2022 versus 2021, Gen Z is more likely than any other generation to buy luxury goods online at 28%, compared with 15% overall for all generations. They also are more loyal to brands they shop with, at 41%, versus 23% overall.
This generation also will remain more loyal to brands they shopped with last year, especially when the brand’s values align with their own. Sine 58% of Millennials, 67% of Gen Xers, 75% of Baby Boomers, and 77% of the Silent Generation stayed loyal to the brands they liked in the last year.
Watch shipping options during the holidays. Coveo’s survey shows 42% of shoppers will leave a site if shipping options are limited or they don’t have a buy online and pick-up in store option (BOPIS). And 35% walk away if they see restrictive returns policies.
Some 86% of consumers say they will shop online the same or more than pre-pandemic, but that doesn’t mean they are shunning in-store purchases. The categories least likely to see online purchases, luxury goods at 15%; sports and leisure, 26%; and health and nutrition, 27%.
Overall, shoppers say their online shopping for the holidays will remain the same. But a closer look reveals that 39% of Gen Z and 31% of Millennials saying they will shop more online. Only 24% of Gen X, 15% of Baby Boomers and 17% of the Silent Generation — which precedes Baby Boomers — plan to do the same.