Rising costs dampen consumer confidence
More than half of consumers (52%) say rising costs are affecting their ability to buy goods. Economic uncertainties and the rising cost of living are putting a dampener on consumer confidence that had been rebuilding post-pandemic.
Fresh food is one of the categories where consumers are noticing price increases the most. Some 72% have seen a rise in prices over the past four months, and more than half (57%) expect this to increase further in the next six months.
As a result of higher prices, consumers are shopping around more. One-fifth (20%) are seeking cheaper alternatives for fresh food.
The rising cost of living means consumers are cutting down on non-essential purchases. Some of the areas where consumers say they will cut down are clothing (38%), beauty and cosmetics (35%) and alcohol (30%).
While rising costs are squeezing more lower-income earners (62%), middle-income earners (48%) and high-income earners (42%) are also feeling the impact of rising costs.
Among increased costs, consumers are prioritising experiences post-pandemic. More than two-fifths (42%) of respondents say they are planning to spend more money on experiences in the coming year.
Younger consumers believe brands are exiting Russia to protect their image
Nearly a third (31%) of Britons believe brands that have ceased trading in Russia as a result of the war have done so to protect their public image.
The data from YouGov suggests younger consumers are most sceptical, with this figure rising to 38% among those aged 18 to 24 and 35% for 25- to 49-year-olds. Those aged over 65 are least cynical, with just 22% believing brands are pulling out of Russia to maintain a positive image.
Men and also more sceptical than women, with 36% believing brands pulling out of Russia are doing so to preserve their reputation, compared to 27% of women.
Overall, the highest proportion of people (34%) believe brands are ending operations in Russia to make a statement against the war.
Older consumers are most likely to agree with this statement, with 45% of over-65s believing brands are making a political statement, but this drops to 38% among those aged 50 to 64, 29% for 25- to 49-year-olds and just 20% for the youngest group of 18- to 24-year-olds.
Women (42%) are more likely to think brands are making a statement against the war than men (26%).
Shoppers feel anger towards retailers that don’t keep products in stock
Consumers have expressed impatience at retailers who fail to keep products in stock. Nearly half (45%) of consumers admit being angered by low stock levels.
Almost two-thirds (63%) of consumers have been left frustrated when products they ordered did not arrive within the quoted time. Overall, 32% of consumers say their online orders have taken too long to be delivered.
Retailers have been experiencing ongoing issues with supply chains in the last year. These issues were particularly pronounced around peak seasonal periods like Black Friday, where 45% of consumers say their orders took too long to be delivered.
More than half of customers now want to have a more personalised purchase journey. Some 59% say they want personalised deals and discounts while shopping.
AI can be a way to implement personalisation. While 77% of business leaders say they have implemented some kind of AI, 90% say their current implementation could be more effective.
Source: Wunderman Thompson Commerce/Satalia
Concerns increase over ‘creepy’ personalised targeting
More than two-thirds (67%) of consumers consider ads that use location to target customers are “creepy”, as awareness of personal privacy increases.
The survey of 5,400 consumers across six countries also finds 62% of people feel uneasy about retargeted ads derived from tracking cookies. While 61% say ads related to something they discussed near a smart speaker are “creepy”. The research finds that consumers prefer to share their data directly and explicitly with brands.
Despite privacy concerns, there is demand for personalised experiences. Customers say they stay loyal to their favourite brands if they understand them as an individual.
Amid criticism from some quarters, big tech players like Apple and Google are making privacy changes to their platforms. Individual consumers are also taking action to take greater control of their privacy.
Given these concerns there has been a rise in use of incognito browsing (up 50%), PC cleaners (48%), password generators (40%), ad blocking tech (37%), paid-for premium software (31%), and password managers (31%).
Source: Cheetah Digital
Consumers return to in-person experiences
In-person experiences are regaining strength post-Covid, with 98% of beer, wine and spirits ‘brand home’ experiences, such as distillery and brewery tours and tasting rooms now taking place in real life again.
In May 2020, at the peak of the pandemic, more than 96% of events were online. By May 2021, that had reduced to 32% online, and 68% in-person.
Consumers are also willing to travel further and spend more during these experiences. Some 60% of guests are travelling more than 100 miles to get to a venue, and consumers are spending five times more per visit than in 2020.
Meanwhile, the appeal of online experiences is wearing off. The research finds that only a third of respondents (33%) are showing up to online experiences, something that holds true for paid experiences as well. For in-person events, that statistic is essentially flipped, with 65% of registrants attending events.
The average net promoter score for online experiences is also lower than in-person. The average NPS for in-person experiences was 78, while for online it was 71.