By Joseph Staples // SWNS
NEWS COPY W/ VIDEO + INFOGRAPHIC
Nearly nine in 10 Americans have seen their cost-of-living increase over the past five years, and a new study has found it’s having a massive impact on how they’re shopping, particularly online.
The poll of 2,000 U.S. adults found consumers now spend the most on groceries (35%), clothing (27%) and home goods (17%) when shopping online.
Over three in four (76%) believe the underlying cause for cost-of-living increases is due to inflation, leading 61% of consumers to shift their online shopping habits.
Commissioned by Forter and conducted by Talker Research, the study showed people have addressed the changes in their cost of living by shopping less often (55%), buying only necessities (44%) and buying the cheapest version of the products they want (34%).
Over a third (37%) have also had to shift their travel plans for the next year due to cost-of-living increases. In order to afford travel, one in 10 are using their credit card points and flight miles and 66% of them are using their points and miles more frequently than they did five years ago.
Results also found many U.S. consumers are changing where and how they shop in response to the cost-of-living increase.
Sixteen percent of Generation Z consumers are shopping on social media platforms more often than the national average (7%); while 19% are shopping on marketplaces more frequently, compared to the 11% national average.
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 the 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 purchases: groceries (20%). Interestingly, nearly one in five Gen Z (19%) respondents use BNPL for rideshare compared to the 7% national average.
To combat their cost-of-living woes, many respondents said they’d be enticed to shop online from companies on a regular basis if they offered some sort of perk. The most popular perk among consumers is free shipping (63%), followed by affordability (61%), frequent sales (36%), free and easy returns (34%) and loyalty programs (33%).
Varied and emerging payments options are also enticing to consumers, including companies that accept digital wallets (20%) and those that offer buy-now-pay-later (BNPL) options/cryptocurrency (15%) and store credit cards (10%).
“The cost-of-living increase means that consumers are fundamentally altering their online shopping habits,” said Doriel Abrahams, principal technologist at Forter. “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 (48%) of all respondents have considered ways to manipulate their online shopping for their benefit including stacking coupons (50%) and reselling highly-sought out 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,” continued Abrahams. “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).
