The just-released “Consumer Culture Report” by 5WPR (New York) was crafted during a time of pervasive rising prices, which means “consumer motivations in 2023 cannot be fully understood without considering the impact of inflation,” says Dara Busch, the agency’s Co-CEO.
“Contrary to popular belief, our report reveals that inflation is not the predominant factor driving consumer decision-making.” Busch explains. “In fact, our findings suggest that consumers remain willing to spend despite inflationary pressures. As a result, our report shifted focus to answer the critical question of what other factors are driving consumers’ purchasing decisions in the current market.”
For example, 60 percent of consumers reported that they have been inclined to indulge in goods and services beyond what they consider necessary. This trend was most notable with shoppers between the ages of 25 to 44, who showed the least amount of restraint in their spending habits. Furthermore, a staggering 80 percent of respondents had already identified the top spending categories they would allocate the majority of their disposable income toward at the start of 2023, indicating a clear intention to spend.
When it comes to savings, consumers highlighted several ways that retailers can help, beyond traditional product discounts. These include waived shipping fees and value-based alternatives, among other options. Our research underscores the need for retailers to innovate and provide creative solutions to help consumers save without compromising on the overall shopping experience.
“The consumer landscape is highly competitive, and it has never been more important for businesses to offer their customers a shopping experience that meets and exceeds their expectations,” said Busch. “Failure to do so could result in losing customers to the brands that do. Modern consumers have limits when it comes to brand loyalty, and it is crucial for brands to consistently work toward establishing and strengthening their relationship with them.”
Fortunately, simply paying attention to customer feedback can help brands to identify areas of perceived value, and to target the most effective channels to use to influence and encourage engagement.
The research for 5WPR’s latest consumer report was conducted by Censuswide, an independent market research consultancy, with a nationally representative sample of 2000 US consumers last November. Then, 5W’s in-house research and analytics practice used an AI-based natural language processing tool to visualize, aggregate and analyze the most important media conversations surrounding inflation, consumer spending habits and supply chain impacts over the past calendar year .
Click here to register to download the full report, which details the markets consumers are geared up to purchase this year, delves into the impact of Buy Now Pay Later (BNPL) on spending habits across different age groups and explores the which marketing tactics can help persuade consumers to make their next purchase.