From Sydney to San Francisco and everywhere in between, global shoppers are struggling to keep up with the rising cost of living. Inflation leads to higher prices for food, fuel, and heating, with serious consequences for both businesses and consumers.
In the shadow of the current recession, Mirakli tried to understand how the economy shapes purchasing decisions on an individual level. How do consumers react to price increases? Where do they go to find a better price? And how can this information help marketers more successfully navigate these troubled economic waters?
The recently published Mirakl Consumer Preferences in the Digital-First Economy study surveyed nearly 10,000 global consumers from 16 countries. Here are some key takeaways from the report:
We have all become “value shoppers.”
Consumers are motivated to buy for many reasons: brand loyalty, faster delivery, personal recommendations, and, of course, price. But as inflation squeezes household budgets, consumers around the world are once again focusing on cutting costs. According to a recent Mirakl study, 89 percent of all respondents are now looking for better value for their purchases due to inflation. Additionally, 72 percent said they had delayed shopping in the past 12 months because of higher prices.
If everyone is a value buyer first, marketers must change their approach to their competitors. Every brand must compete on price in addition to other, less tangible factors. The study also found that high-priced shoppers are more likely to consider buying refurbished or used products and are more likely to prefer online marketplaces, where prices can be more competitive. Pay attention to sellers.
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Loyalty has its limits.
The damaging effect of loyalty is not a theory; it is a fact. According to a recent Mirakl study, 43 percent of respondents stopped shopping at a particular retailer because of price increases. Even more astounding, only 17 percent of consumers continue to shop with trusted brands regardless of price. To prevent loyal customers from falling off the brand ladder and looking for a cheaper competitor, retailers must introduce similar products at a lower price. Brand loyalty can’t afford a budget.
Of course, this recession won’t last forever. Brands need to stick to the playbook that has allowed them to build loyal followings and increase customer lifetime value if they are set to thrive as the economy recovers. Global consumers continue to value convenience and customization—and this is expected to continue as inflation begins to moderate.
A vision of the future
No one knows what the future holds for e-commerce, but one thing is certain: consumers will continue to spend online. Notably, 86 percent of respondents expect to increase their online spending over the next 12 months because of the value they can derive from e-commerce, even despite economic headwinds. A large part of the expenditure is directed to the markets. Marketing spending increased by 10 percent in 2022 compared to the previous year. In addition, 94 percent of consumers confirm that they will maintain or increase their shopping expenses in the future. However, we have seen repeated boom and bust cycles over the last 15 years, and only brands that can roll with the shocks have thrived. According to Mirakl’s consumer research, the future of e-commerce should see more personalization and many new marketing opportunities. More than half (56 percent) of respondents say they are more likely to shop on sites that offer personalised recommendations. Shoppers are also interested in loyalty and membership programmes, shopping integration with social media, and influencer-curated product selections to enhance their shopping experience.
Inflation has left online sellers little room for error. But by listening to their customers and making smart adjustments, e-commerce leaders can weather a downturn and bounce back quickly.
