To stretch their dollar, 72% of U.S. consumers have cut spending to make up for higher prices.
If you’re worried about your dollar’s buying power shrinking, you’re certainly in good company as 72% of Americans have cut spending in some form to make up for rising prices.
According to a recent report from market analytics firm Jungle Scout, 72% of consumers are spending less on everyday goods amid inflation that reached a 40-year high at 7.9% in February. 70% chose “fun” and “impulse buys” as the first category in which they’re cutting spending.
While certain items (I’m sure you’ve heard of what is happening to bacon, gas and baby diapers) are seeing particularly dramatic spikes in price, the effect of inflation is also psychological.
Even if the price increases in most categories are minimal, many fear more dramatic spikes to come — a recent survey found that inflation was a worry for nine out of 10 Americans. Out of the 1,000 people surveyed, another 38% are spending less overall while 34% are spending less online.
If It’s Not On Sale, We Don’t Buy It
When they do shop online, 53% of consumers make a purchase when presented with a deal, coupon or discount code while 47% only purchase products that are either on sale or discounted.
Amazon (AMZN) – Get Amazon.com, Inc. Report, Walmart (WMT) – Get Walmart Inc. Report, eBay (EBAY) – Get eBay Inc. Report and Target (TGT) – Get Target Corporation Report are, in that order, currently the most popular online retailers. Unsurprisingly, mega-retailers offering various types of discounts and deals will be the ones best poised to draw in buyers and weed out competition.
“Rising inflation is making consumers keep a tight hold on their wallets and seek out deals and discounts more than ever,” Michael Scheschuk, chief marketing officer at Jungle Scout, said in a statement.
JungleScout
But We Are Still Spending Money On Home Improvement
In further evidence of the psychological effect of inflation, many are putting the money they saved on other categories toward home improvement — 50% of those surveyed are more willing to spend money on their homes than they were pre-pandemic.
After groceries and other essential items, pet supplies, clothing and beauty and personal care remained the biggest spending categories.
“As consumers lean into homebody living, categories such as self-care and home will thrive,” Scheschuk said. “This presents an opportunity for e-commerce brands to build consumer loyalty with the right products, perks, and promotions to meet shoppers’ needs.”
But more than anything else, shoppers are drawn in by affordability as 47% chose it over quality, familiarity, and sustainability when choosing a brand.
