Holiday Shopping Is Poised to Suffer as Consumers Cut Back

U.S. retailers might not have a happy holiday season, according to the results of a new survey on consumer habits from ecommerce service provider Digital River. The data showed 38% of U.S. adults expect to spend less at Christmas, compared to 32% who don’t plan on cutting costs. The survey also found most consumers have already shifted their shopping behavior due to concerns about inflation, with 67% reporting they reduced spending on vacations, holiday shopping and other nonessential items over the last six months. In addition, 45% of adults said their financial situation had worsened in the past year. As prices rise, shoppers are looking for deals and trying to stay more aware of their spending. The study found 67% of ecommerce shoppers said they’ve noticed price increases when buying online in the past six months. Of those shoppers, 47% have cut back on online shopping while 39% have been turning to discount codes, and 29% are more regularly checking price comparison sites. Meanwhile, 57% said lower prices would make them shop online more, and 48% said they would buy more if there were discounts. Price sensitivity seems to be the dominant issue, with only 34% citing delivery times as a barrier to more purchases and 26% looking for a wider variety of products. Despite these concerns, 52% said they don’t expect their online spending to change, while 30% expect to shop online more frequently. While most of the respondents said buying online is more convenient than shopping in person, 41% cited ecommerce as a way to avoid travel costs and 29% said they were able to reduce their spending by shopping online more. “We’ve seen how inflation has impacted our economy: Consumers told us they are decreasing their spending across the board, most notably on special occasions, including holiday shopping and vacations,” Digital River chief revenue officer Ted Rogers said in a statement. “However, our research has shown the pace of online spending isn’t expected to slow down despite the squeeze on finances.” As a result, Rogers said brands must ensure they have optimized their digital stores to make the shopping journey as transparent and friction-free as possible—and make sure consumers aren’t surprised by any extra costs. Infographic: How to Win Gen Z and Millennial Shoppers’ Loyalty