Consumers are spending continuously more on certain products across different categories though inflation is casting the volume growth. Considering the pre-pandemic period, spending on goods was higher than on services which also counts as 2 percent lower. The prediction is that this pattern will continue till more and more people are easy being in crowds and attending public indoor activities.
In the face of obstinate inflation partly influenced by the Ukraine-Russia war. Consumer confidence grew steadily through 2021 but witnessed a dip in February 2022.
The “loyalty stir-up” remains. Switching to different brands and retailers in 2022 has been witnessed among most consumers in the United States since the beginning of the pandemic. And this behavior continues to stay inducted into their routines. Reasons? More people are looking for value as inflation is at a record high. Price tops the list of consumers while making purchase decisions and brand switching.
The big reason for ‘availability’ was persistent from the start of the pandemic till 2021, and it’s too now – matters a lot as a differentiator compared to the height of the pandemic when the supply chains were disrupted.
It’s both – online and in-store, and shoppers are spending more. At the start of the pandemic, people began to shop from the drive-thru, and that was because they didn’t have the choice either. But then, they were enjoying the convenience offered by e-commerce. Even after the brick-and-mortar reopened, online shopping and spending behavior were climbing. Contrary to what certain people experts suggested, the growth of online retail hasn’t made brick-and-mortar stores obsolete. The in-store shopping and retail experience is increasing at a rapid rate.
Omnichannel shopping is becoming the norm.
Omnichannel behavior isn’t limited to just a handful of goods: people use it to purchase food items and other non-food products in different categories. Unsurprisingly, the influence of social media is most prevalent among younger consumers and is particularly relevant to categories related to appearances, such as sports and cosmetics clothing. Social commerce, already an established phenomenon in China, is just beginning to take off within the US market. Yet, the majority of omnichannel shoppers have already purchased through social media.
Values are paramount, but ESG (environmental, social, and governance issues) still matter.
With inflation making it more common for consumers to change brands, value has become more important than values; in a sense, companies that satisfy consumers’ needs in terms of deals and value are the best place to achieve the success they seek. Most younger customers prefer authenticity and social issues, such as equity, diversity, and inclusion. On the other hand, older consumers are more attentive to environmental and health concerns.
When it comes to deciding which brands to purchase in particular, the younger generation believes the choices they make are at the very least influenced by environmental, social as well as governance (ESG) factors.