Despite the economic downturn, online spending is still strong but new research shows consumers likely to avoid major purchases in next six months.
With inflation and cost-of-living pressures stinging Australian consumers, it’s no surprise that budgets are tightening. In fact, new research from eCommerce experience platform – preezie – finds 76 percent of consumers are now likely to avoid major purchases such as high-value goods, luxury products, and expensive electronics in the next six months.
Despite this pull back on big purchases, preezie’s research also revealed that Australian shoppers are still actively and consistently spending online. The data shows that 75 per cent of Australian consumers have either maintained or increased their online shopping spend compared to six months ago. Similarly, nearly 64 per cent anticipate maintaining or increasing their online shopping spend in the next six months, even while facing ongoing inflationary pressures.
The findings, detailed in preezie’s new ‘Inside the mind of the 2023 online shopper’ report, indicate that a significant portion of the population has actually ramped up their online spending habits in the last six months – but with big ticket items out of the question, consumers are putting their money towards more affordable luxuries or small indulgences.
Michael Tutek, co-founder and CEO at preezie, said: “Despite consumer reluctance to splurge during economic downturns, some premium brands still manage to defy the odds. This can be attributed to the ‘lipstick effect’, which suggests that individuals seek out affordable luxuries as a means to uplift their spirits and maintain a sense of normalcy. By indulging in these lower-cost treats, consumers can experience a hit of luxury without straining their budgets.
“On top of this, our research suggests that online spending is still going strong, even when living costs are rising. This could be attributed to various factors, such as an increased reliance on eCommerce due to convenience, changing shopping preferences, or the influence of external factors like the COVID-19 pandemic that are still lingering. This data suggests a growth opportunity for the eCommerce industry, as it reflects an increase in consumer demand and engagement with online shopping channels,” added Tutek.
Behaviour changes for the modern consumer
While it’s clear that consumers are consistently and increasingly shopping online, there have been significant changes to the way they shop and the customer experience they expect retailers to give them. With more retailers and product diversity than ever before, consumers are empowered to be more selective about who they choose to shop with – and now have higher expectations for the brands that seek to attain their loyalty.
Overall, consumers are increasingly demanding more unique, personalised shopping experiences, with 78 percent of Australian shoppers finding it appealing to receive an experience tailored to their needs – including variables such as budgets, hair types, individual fashion styles, and even outfit occasions. Seventy-nine percent of respondents also find it appealing to receive offers, discounts, and limited-edition products or services from online retailers, with 68 percent more likely to shop regularly with brands that offer shopper incentives like free gifts and free shipping.
Tutek says: “This customer desire for a unique and personalised online shopping experience has been a growing trend in the past few years, but now it’s a deal breaker for brands that don’t offer it. To achieve a truly personal experience, retailers need to be engaging with customers on all fronts. While retailers can harness the customer information they have at their disposal to tailor a customer’s shopping journey from website to checkout, something that is often overlooked is customer engagement post-purchase.
“The journey doesn’t just end at the checkout. To achieve true customer loyalty, retailers need to implement strategies to continue engaging with customers after the sale, like order follow-ups, exclusive loyalty programs, and special offers from affiliate brand partners.”
Aussie shoppers more aware of price sensitivity
Customers in 2023 are also conscious of price sensitivity. Under financial constraints and during times of economic uncertainty, consumers have become more sensitive to price, actively seeking out lower-priced options and being more receptive to promotions and discounts.
The research reflected this, with 83 percent of Australian shoppers likely to shop around for lower prices in the next six months, and 85 percent likely to actively look for deals, discounts and promotions to stay within budgets in the next six months.
“What has been predominantly clear in our research is a huge rise of not just consumer price-sensitivity but also ever-changing consumer behaviors. Proactive and innovative thinking around customer experience excellence has become vital for retailers looking to adapt and future-proof their business to thrive in a volatile retail landscape,” said Tutek.
Free download here: ‘Inside the mind of the 2023 online shopper’