Special occasions are taking a big hit as consumers adjust their spending amid financial concerns fueled by inflation.
Forty-percent of consumers are spending less on summer vacations — including 49% who are reducing travel expenses — and 38% expect to spend less at Christmas this year, according to a study by Digital River on how inflation is impacting consumer spending habits.
The research, conducted by Opinium, found that “buy now, pay later’ has increased amid rising prices. Of those surveyed who were already using this payment option, 64% of online shoppers said they have used this payment method more often in the last six months when buying online. Half (51%) used BNPL as a convenient way of paying, followed by squeezed finances (48%) and increased product costs (44%).
In other findings, 71% of consumers have noticed heightened prices in-person over the last six months and 67% have noticed rising online prices.
For those who have noted pricing increases online, 47% have reduced their online shopping as a result, followed by 35% who have tried to find discount codes, and 29% who have used comparison sites more frequently.
In addition, 64% of online shoppers say they want more help from retailers to deal with rising prices caused by inflation. Without it, online shopping is expected to lessen in popularity, with 49% of consumers agreeing that online purchases would be first to go if they needed to reduce their spending.
Other highlights from the Digital River survey are below:
• Forty-two percent of U.S. adults said that they make an online transaction at least once a week. Thirty-nine percent have shopped online more frequently in the past six months and 54% expect to increase their online shopping tendencies due to convenience.
• Despite growth in e-commerce, 45% of consumers noted not being able to see products in-person as a major barrier of online shopping, followed up by delivery price (35%).
• Thirty-one percent of credit card users are using their card more often, with 44% saying it is due to convenience, followed by tighter budgets (42%) and increased product costs (40%)
“Our research has shown the pace of online spending isn’t expected to slow down despite the squeeze on finances,” said Ted Rogers, chief revenue officer at Digital River, a global commerce enabler for established and fast-growing brands. “Brands must ensure they have optimized their digital stores to make the shopping journey as transparent and friction-free as possible, making sure consumers aren’t surprised by any extra costs.”
To see complete survey results, click here.