Digital River, an experienced global commerce enabler for established and fast-growing brands, has revealed how rising costs and inflation have impacted US consumer habits. The new research, conducted by Opinium, explores how US consumers’ finances and general spending have changed over the past six months due to the current socioeconomic landscape.
Special occasions such as vacations and holidays are taking a big hit
US adults are expecting to reduce their spending on special occasions this year, as inflation has attributed to financial concerns for consumers. According to those surveyed, top of mind are summer vacations and the pending holidays.
• 67% of consumers surveyed have reduced their spending on “non-essential” items in the last six months (including vacations and holiday shopping)
• 40% are spending less on summer vacations, including 49% who are reducing travel expenses
• Over a third (38%) expect to spend less at Christmas this year, while another third (32%) are planning to spend the same as usual
Online shopping remains the preferred method for shopping
Although US consumers are actively looking to support their budgets through decreased spending on non-essential items such as vacations and holiday shopping, online purchasing remains high. In fact, 42% of US adults shared that they make an online transaction at least once a week.
• 39% have shopped online more frequently in the past six months
• 54% expect to increase their online shopping tendencies due to convenience
• Despite growth in ecommerce, 45% note not being able to see products in-person as a major barrier of online shopping, followed up delivery price (35%)
As a result of skyrocketing prices, BNPL use has increased
Of those surveyed who were already using Buy Now Pay Later, 64% of US online shoppers say they have used this payment method more often in the last six months when buying online. Half (51%) used BNPL as a convenient way of paying, followed by squeezed finances (48%) and increased product costs (44%). In comparison:
• 60% of credit card users are using this payment method about the same as usual
• 31% of credit card users are using their card more
• Among those using their card more, 44% say it is due to convenience, followed by tighter budgets (42%) and increased product costs (40%)
US shoppers are looking towards retailers for help
For every kind of good, whether purchased online or in-person, US shoppers have noted price increases in the last six months. 71% of consumers have noticed heightened prices in-person over the last six months, compared to 67% who have noticed rising online prices.
• For those who have noted pricing increases online, 47% have reduced their online shopping as a result, followed by 35% who have tried to find discount codes, and 29% who have used comparison sites more frequently
• Almost two-thirds (64%) of US online shoppers say they want more help from retailers to deal with rising prices caused by inflation
• Without this, online shopping is expected to lessen in popularity, with 49% of consumers agreeing that online purchases would be first to go if they needed to reduce their spending
“We’ve seen how inflation has impacted our economy: consumers told us they are decreasing their spending across the board, most notably on special occasions, including holiday shopping and vacations,” said Ted Rogers, Chief Revenue Officer at Digital River. “However, our research has shown the pace of online spending isn’t expected to slow down despite the squeeze on finances. Brands must ensure they have optimized their digital stores to make the shopping journey as transparent and friction-free as possible, making sure consumers aren’t surprised by any extra costs.”
To see complete survey results, please visit here.