Once-loyal customers are turning into merchant-agnostic deal-chasers, as 56 percent of U.S. retail shoppers switching merchants to save some bucks and price influences 67% of shoppers’ choice of a large retailer. This discretionary spending pullback is visible in stores and online, and across financial lifestyles, according to a new report from PYMNTS.
Of the spend categories surveyed, the clearest falling under the umbrella of everyday discretionary segments are clothing and sporting goods, and both experienced sales drops between September and December, the report states.
“There are also anecdotal signs of this spending pullback’s effects,” the report notes. “Small merchants dropping free shipping perks are at an increased risk to lose customers, while large retailers are adding fees for faster service. Additionally, the resale market is having a mainstream moment as both buyers and brands embrace the potential of pre-owned items.
“This has left stores such as Nordstrom, once known for its luxury apparel and top-notch service, instead offering deep discounts to move inventory. To combat this economic headwind, famous brands like Hasbro are decreasing their product lineups.”
On the plus side, the report notes that the current inflationary cycle will eventually end, as virtually all cycles inevitably do. “When that happens, the discretionary segment may be the first to recover, as consumers spend normally again,” it concludes.
Click here for the full report.