Why Rising Prices Are Changing the Way We Shop
Rising inflation rates and supply chain shortages are causing more consumers to hold off on making big purchases in 2022 — and that’s giving retailers reason for concern.
According to a new survey by Shopkick, 81% of consumers say price increases have made them more likely to wait on making a purchase until there is a sale or coupon, and 79% say they would purchase the next best option if their favorite brands were sold out or low-in-stock.
While it’s not a surprise that consumer shopping habits would evolve in the aftermath of the Covid-19 pandemic—after more than two years of social distancing and temporary restrictions on in-store shopping—the shift in spending behavior has been swift enough to make retailers take notice.
Among in-store shoppers whose time of day and frequency of shopping has changed post-pandemic, 52% say they now go to the store at less busy times and 23% say they go to the store fewer times a week. Seventeen percent say they go to the store at less busy times and fewer times a week.
“As inflation rates and prices continue to rise, we should expect to see consumers’ behavior evolve, as they will continue to be more selective and considerate of where and how much they spend,” says Brittany Billings, executive vice president of strategic markets and marketing at Shopkick. “Retailers and brands need to deepen their relationship with shoppers by creating new ways to acknowledge and incentivize their patronage.”
More than half of consumers who say they have changed where they shop are now visiting big box retailers, like Target and Walmart, more frequently. They’re also doing more research online before making purchases in-store.
How long these trends will continue remains to be seen. Shopkick’s survey of more than 20,000 consumers across the country was conducted in late February, just as the Omicron wave was beginning to subside. As more Covid-19 restrictions are loosened, it’s possible consumers may shift back to their pre-pandemic ways.
“The past year has been challenging for everyone—manufacturers, retailers, and consumers—and this data is a meaningful proof point. The biggest takeaway is that many consumers continue to struggle not only to find—but pay—for the everyday items their families need, and they are making trade-offs,” Billings says. “For brands and retailers to retain customers, it is essential to deliver a frictionless and connected shopping experience in-store and online to earn shoppers’ share of wallet.”
Consumer weariness over pricing and inflation wasn’t the only finding in Shopkick’s survey that surprised Billings. She was also surprised to see consumers’ willingness to forgo purchasing the brands they know and love in light of those pricing considerations. Even those consumers who’ve demonstrated extreme brand loyalty in the past are up for grabs in today’s environment.
“As product shortages and supply chain delays continue to impact our day-to-day lives, brand loyalty is starting to waver and more consumers are choosing to purchase alternatives to their favorite brands,” Billings says. “We’re being reminded that the product is the necessity, not the brand.”
As shopping behaviors continue to evolve, Billings says retailers need to listen to customers and make the in-store shopping experience more enjoyable and seamless. That means enhancing the in-store experience through technology and finding ways to help customers make better purchasing decisions in real-time.
“Retailers need to support shoppers before they even make the trip in-store by creating inventory and [making]price checkers available online … They should also offer mobile in-store navigation and up-to-date technology such as IoT, augmented reality, or computer vision to keep shoppers in the know,” Billings says. “Adapting to shifting behaviors can be powered by merging the digital and physical shopping experience and leveraging omnichannel capabilities, bringing the ease of shopping online to the in-store experience.”
Stephanie Miles is a senior editor at Street Fight.