Despite economic headwinds and stubbornly high inflation, UK shoppers’ online spend intentions remain resilient, led by younger consumers, new data from Wunderkind, the leading performance marketing solution that scales one-to-one messages for retailers and brands, reveals.
Original research of 1,000 consumers in Wunderkind’s ‘Industry Pulse: Consumer Spending During Economic Uncertainty’ report showed that while UK shoppers are expressing caution, especially around non-essential and luxury purchasing, 42% plan to maintain their usual levels of eCommerce spend throughout 2023.
Almost a third (30%) of UK shoppers said they plan to cut back on essentials, a trend that has already been observed in the grocery sector, with supermarket shoppers switching from established brands to own brand products, and spending more in discount stores.
With grocery price inflation remaining close to an all-time high in May, rising at the third fastest rate since 2008, Kantar reported a 46% rise for supermarkets’ own label lines. Meanwhile research by Pricer suggests 61% of UK consumers have now switched some of their food shop to discounters such as Aldi and Lidl.
Over half (54%) of the UK consumers polled in Wunderkind’s survey admitted to limiting their spending cuts to luxury items, with 64% cutting back on non-essential, discretionary items. However, 42% plan to maintain their usual levels of eCommerce spend in 2023, with younger demographics displaying the greatest levels of confidence; just over one-fifth (22%) of Gen Z said they feel that they need to reduce discretionary spending.
The cost-of-living squeeze is also, unsurprisingly, prompting UK shoppers to reassess the quality of the goods they buy, with 42% saying they plan to spend less often, but will turn to higher priced, better quality items when they do make a purchase. This is compared to 36% who will buy more affordable or poorer quality items.
Wulfric Light-Wilkinson, General Manager at Wunderkind International, commented: “Consumers already had myriad buying triggers and considerations prior to the cost-of-living crisis, and now the inflationary squeeze is making what were already convoluted spend decisions more complex.
“Shoppers’ loyalties to brands are being assessed, they’re thinking more carefully about what they can and can’t afford, and they’re being compelled to make tough purchasing decisions. For brands, this period is all about giving customers value; it’s about providing them not only with the things they want, but putting effort into retaining — and strengthening — the customer-brand relationship. Consumers’ brand allegiances are being tested, and the retailers that step up will win out in both the short- and long-term.”
To find out more about the latest consumer sentiment and spending habits and how retailers can leverage owned channel optimisation to improve customer engagement, download the Wunderkind Industry Pulse report.
