Throughout the world, consumers are making tough spending decisions as they navigate inflation and a cost-of-living crisis. In its recently released report, Consumer Preferences in the Digital-First Economy, Mirakl surveyed over 9,000 global consumers across 16 countries in order to understand how the economic downturn is shaping purchasing decisions.
These six key takeaways can help retailers navigate the current economic conditions and solidify their position as the economy recovers:
- Value shoppers dominate the landscape: According to the survey, a remarkable 89% of shoppers report that inflation has made them look for better value when shopping, and four in 10 say that cost is the most important factor as they weigh different product options. If retailers can introduce new product options at more competitive price points, they’ll stand a better chance of maintaining their customer base during the downturn.
- Brand loyalty is fading away: Retailers are at risk of losing their most valuable customers. Just 22% of consumers say they continue to shop with the brands they trust regardless of price, and 43% of respondents said they stopped shopping with a specific retailer as a result of inflation. Brand identity and customer service are important, but they aren’t enough — if the price isn’t right, customers will look elsewhere.
- Online spending is on the rise: While the majority of shopping is still conducted in physical stores, eCommerce is gaining momentum. Three-quarters of shoppers expect to do more of their shopping online in 2023 as a result of lower prices and better value.
- When it comes to reliability, physical stores can’t compete: Online retailers aren’t just winning on price; they’re also offering better product availability. When a product they normally purchase in store is out of stock, 52% of shoppers say they look for it online often or very often. And if they find that product online, 71% of those shoppers will look for it online first the next time they need it. As brick-and-mortar stores continue to struggle with out-of-stocks, they’ll continue to lose market share to their online competitors.
- Personalization draws customer interest: In 2023, online shoppers expect an elevated experience. More than half (56%) of respondents say they’d be more likely to shop on websites offering personalized recommendations, demonstrating the need for retailers to collect and organize their customer data.
- Marketplaces gain momentum: Some business models are succeeding even in spite of the current economic environment. Marketplaces, which offer a one-stop shop for products from a variety of sellers, are particularly popular because of their low prices and convenient customer experience. Notably, 94% of global consumers expect to shop on marketplaces about the same or more in the future. It will soon become a business imperative for eCommerce players to sell on online marketplaces — or operate their own.
Consumer sentiment is clear, and retailers can’t afford not to act. Businesses that wait and see how the economic situation unfolds will find themselves falling behind their more agile competitors. Online retailers need to work quickly, adapt to the moment, and find new ways to attract and retain value shoppers.
Adrien Nussenbaum is co-founder and co-CEO of Mirakl