UK consumers are continuing to increase their spending online, despite the impact of the cost-living crisis and inflation, according to research from Digital River and Opinium.
The survey of 2,000 UK consumers found that 17% of adults are struggling financially, with an additional 35% just ‘getting by’. This has meant that 58% of people have reduced their spending on non-essential items in the last six month. But, despite this, 47% are continuing to make at least one online transaction each week.
Overall, the past six months have seen 33% of consumers shopping online more frequently, compared to only 9% shopping more in-store. And 22% of respondents are expecting to continue increasing their online shopping in the future, while just 8% will look to do more shopping in-person.
One of the big factors behind consumers increasing their use of ecommerce is that they can often find lower prices, and track and compare price changes, online. 29% of UK online shoppers feel that it’s easier to track prices online than in-person, while 29% of those planning to increase their online shopping point to items being cheaper driving them toward online purchases.
The evolution of online payment methods is also playing a role, with buy now, pay later (BNPL) payment methods becoming more prevalent every day. 15% of UK adults are now using BNPL services for online shopping, with 59% of those doing so to stretch their budgets further. Furthermore, 66% of BNPL users have used the method more in the past six months, and 49% of them are doing it due to a tighter financial situation.
Although online shopping continues to be strong, 41% of respondents would look at online purchases as being the first thing they cut if they need to reduce spending. As such, it’s imperative that retailers explore ways to help consumers to continue making purchases.
50% of shoppers want more help from retailers to deal with rising prices. Meanwhile, 32% think that delivery pricing is a barrier to online shopping, with 48% stating that free or cheaper delivery would offer them with the most help. Consumers also want to see more online vouchers (38%) and easier price comparison (31%) available to them.
“We’ve seen how inflation has impacted our economy: consumers told us they are decreasing their spending across the board, most notably on special occasions, including holiday shopping and vacations,” said Ted Rogers, Chief Revenue Officer at Digital River.
“However, our research has shown the pace of online spending isn’t expected to slow down despite the squeeze on finances. Brands must ensure they have optimised 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.”