Amidst Inflation in the 'Post'-Pandemic Era, What Does E-Commerce Look Like Now?
While U.S. consumers are starting to feel the impact of prolonged inflation, as food and gas prices eat up more of their income, they have, for the most part, been resilient throughout the pandemic and world events.
The current economic uncertainty has led to a two-fold question about shopping behavior: What are consumers feeling about their finances? And how does that influence the way they're shopping?
A survey conducted by SmartCommerce revealed that, in fact, most shoppers (60 percent) feel good about their personal financial situation. Not surprisingly, though, higher-income respondents are more likely to report feeling positive about their current economic situation, with 45.2 percent of respondents earning $125k or more feeling “very good” and only 14.6 percent of those with incomes less than $75k feeling the same way about their situation.
Amidst this financial backdrop, convenience is a key driver for trying new stores, outweighing saving money, with nearly 50 percent of respondents reporting they're shopping when and where it’s easy for them. Furthermore, while sales and discounts spurred some of the trial, the desire to try something new for fun was also very strong.
The survey also found that shoppers are trying new products, with 41 percent of survey respondents reporting trying private-label brands, and nearly 39 percent trying national or local brands.
Notably, however, promotions remain extremely important, with 75 percent of respondents reporting using some sort of promotion or savings tool weekly. In fact, when it comes to the economic impact on consumers’ shopping choices, survey respondents would prefer to seek out coupons rather than switching brands or buying less (as indicated by the responses/chart below).
Q: How often do you use coupons/promotions when you're shopping?
- 35.9% of respondents said that they use coupons/promotions every time they shop.
- 39.2% said that they use coupons and promotions one time to two times per week, revealing that 75 percent-plus use coupons/promotions weekly.
When asked, “If economic conditions caused prices to rise for groceries or personal care items, how would your choices be affected?” 32.5 percent said they would look for coupons/savings on products they like; 28.5 percent would look for less expensive brands; 20.3 percent would go to different stores to look for bargains; and just 18.7 percent would try to buy fewer items.
In terms of savings tools, consumers are using a variety of ways to save, including a mix of coupons, discount codes, in-store promotions and savings apps.
Retailers are addressing consumer sensitivity to continued price increases for e-commerce and in-store shopping. The move by Best Buy to increase its number of outlet stores — as well as adding an outlet deals section to its website — is evidence of this strategy.
Further Implications for Online and Brick-and-Mortar Retailers
Despite predictions about a drop in online shopping as many consumers return to offices, social events and in-store shopping, e-commerce sales are still way up from pre-pandemic levels, indicating a long-term shift in shopping trends.
Recall that our first survey in 2017 showed that only 27 percent of shoppers had EVER ordered groceries online. Now 25 percent will do MOST of their grocery shopping online — a significant shift. Furthermore, blended shopping for grocery and personal care items (including in-store, online and online/pickup) continues to grow with another 42 percent of respondents reporting they'll use a mix of options over the next six months, according to the survey. (Details below.)
Q: How will you be shopping for groceries or personal care items over the next six months?
- 42.3% of respondents expect to mix their shopping: in-store, as well as a mix of pickup and delivery. With convenience being a main driver in choosing, this is no surprise that consumers are shopping where it's easiest that day/time for them.
- One-quarter of respondents reported that they'll be shopping mostly online over the next six months.
So, given the sluggish economy, as inflation continues to be a factor, along with a slow return to full in-person activities, a mix of online and in-store shopping appears to be the answer for today’s consumer.
Jennifer Silverberg is CEO of SmartCommerce, which, through its Click2Cart technology, enables consumers to add products to their virtual shopping carts directly from digital ads, influencer blogs, packaging, emails, videos and more.
Jennifer Silverberg is the CEO of SmartCommerce, the international solution helping leading CPG brands like P&G, Unilever and Nestle own and drive their customers’ online buying experiences. SmartCommerce provides unique, brand-focused solutions that help build brand-customer connections in the rapidly changing CPG marketplace.