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What’s really driving retail purchasing today?

June 27, 2022 5-MINUTE READ

How retail consumers are thinking, spending and living

It’s not easy for retailers to understand what motivates consumers’ purchasing decisions. Global economic, social and cultural forces are in flux, and uncertainty is everywhere.

 

This is why we have been regularly surveying consumers over the last two years to understand their consumption habits—and what shapes them.

Three retail industry trends

In our most recent survey, there are three trends emerging that retailers should pay special attention to as they drive the business forward. While these trends will naturally morph, they will continue to have an impact in the long term.

The anxiety pivot

Economic worries have eclipsed health concerns. Learn more.

The spending shuffle

Spending patterns have shifted dramatically. Learn more.

The virtual reality check

Physical and virtual worlds are blurring and blending. Learn more.

Trend 1—The anxiety pivot

It’s no surprise that during the height of the pandemic consumers were very concerned about their own health. Today, they are more anxious about their own finances and the economy, which is also not surprising given the turbulent times we are living in.

46%

Of global consumers are concerned about their personal health.

56%

Of global consumers worry about their country’s economy.

Retailers can respond by reinforcing the relationships they have with customers by recognizing and responding to their economic concerns. They can do this by providing opportunities for people to stretch their money further or reassurances around stable pricing and value for money.

Trend 2—The spending shuffle

As consumers feel squeezed by the economy, they are making new and sometimes difficult spending trade-offs. Consumers with lower incomes are the most likely to do this, reducing spend on luxury items, socializing or eating out, and big-ticket purchases—and retailers will certainly feel the impact of these consumer trade-offs.

 

However, there is a notable spending trade-off that consumers don’t plan to make—regardless of their income—and that’s on health and fitness. 

41%

High-income consumers plan to increase spend on ‘health and fitness’ by 41%.

21%

Low-income consumers plan to increase spend on ‘health and fitness’ by 21%.

At times like this when consumers are reevaluating spending, retailers should take a hard look to understand the categories that consumers are the most focused on. The best offerings will be those that reflect and understanding of human needs and deliver value for the price.

Trend 3—The virtual reality check

In addition to changing what they buy, consumers are also interested in and willing to change how they buy.

 

It is certainly true that some consumers who shopped online in 2020 and 2021 are likely to return to brick-and-mortar stores, and that the store of tomorrow will look very different.

 

However, consumers’ lives are becoming more digital all the time. And what may be surprising is that people of all income levels and generations are interested in shopping for real-life products in virtual worlds.

39%

Of consumers have bought clothing or accessories for an avatar or for themselves.

39%

Of consumers have had a consultation in a virtual or augmented reality environment on topics from health and wellness to DIY projects.

The metaverse has arrived, and the best thing that retailers can do today is start to experiment.
Rather than waiting and watching, retailers should be exploring how—and at what pace—they will get into the metaverse.

No crystal ball? Stay close to retail consumers

So much has happened in our lives in recent times. And who we are as consumers continues to evolve. While there is uncertainty everywhere, retailers can manage through it by staying close to consumer trends and evolving fast to respond to them. 

 

What’s the best kind of innovation for the future of retail? It’s thinking and doing grounded in data insight. That’s how retailers can stay aligned with what’s really driving retail purchasing. Read full report.

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