Shoppers reducing spend in half of retail categories

Shoppers reducing spend in half of retail categories

SheerID has announced the findings of a survey designed to understand how the current economy is impacting consumer’s spending habits. The survey also sought to understand how shoppers felt about the downturn, how their purchasing behavior has changed, and what brands can do to engage, acquire, and retain them. This new data comes from a survey of more than 4,000 consumers in the United States and the United Kingdom that was conducted by market research software provider, Centiment in January of 2023.

The survey found that nearly 70 per cent of United States consumers – and 76 per cent of consumers in the United Kingdom – expect the current economic downturn to last more than 12 months. And in response to higher prices, higher interest rates, and their bleak outlook on the financial future, more than 90 per cent of shoppers are reducing or changing their spending habits. Specifically, they are spending less (50 per cent), eating out less (48 per cent), tightening their budget (48 per cent), purchasing fewer non-essential items (45 per cent), and shopping with less expensive brands (38 per cent).

The majority of consumers also said they were spending less in more than half of the categories they were asked about – spending less on software (50 per cent), travel (51 per cent), furniture (52 per cent), apparel, footwear, and accessories (53 per cent), gaming (53 per cent), electronics (54 per cent), take-out/food delivery (62 per cent), and craft/home improvement supplies (72 per cent).

What consumers want from retailers

Survey respondents revealed that they are inspired to purchase from retailers who create an emotional connection with them while also providing price relief.

When asked what would motivate them to try a new brand, 66 per cent indicated “an exclusive discount for my community” is the preferred option. This was by far the most popular tactic, beating out a general discount (55 per cent), better customer service (37 per cent), access to buy-now-pay-later financing (26 per cent), and even personalized offers based on interests collected from their website activity (19 per cent).

Needs of consumers vary by affinity group

All consumers like discounts, but the survey revealed that consumers who belong to communities they strongly identify with found exclusive offers for their group more compelling – 62 per cent of students, 65 per cent of the military, and 78 per cent of teachers said receiving a special discount for their communities would motivate them to try a new brand.

Brand generosity inspires emotional engagement and customer acquisition

More than 60 per cent of all the consumer communities surveyed said they feel more emotionally connected to brands that give them an exclusive offer. Surveyed students said they feel excited (58 per cent), while other communities – healthcare workers (58 per cent); teachers (63 per cent); first responders (63 per cent); and military (63 per cent) feel appreciated.

Consumers are loyal to brands that reward them for the groups they belong to

Survey results indicate that exclusive offers plant the seed for tremendous brand loyalty. More than 70 per cent of consumer communities – including 91 per cent of teachers – said they would likely join a brand’s loyalty program to receive an exclusive offer.

That seed of loyalty grows into a deep commitment to the brand. Seven in ten consumers belonging to identity-based communities said they are more loyal to brands that give them an exclusive offer. And exclusive offers turn consumer communities into brand advocates at an even higher rate. More than 9 in 10 said they would share an exclusive offer with others who were eligible for it.

“There’s no question that the down economy has stoked consumer pessimism and chilled spending, but these findings give brands a clear path to engage shoppers,” stated Jake Weatherly, CEO of SheerID. “Providing consumers with an exclusive offer based on the group status that they are proud of is a tried and true strategy for meeting both their emotional and financial needs. And when brands do that they attract and retain loyal customers in good times and bad.”


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