From Sydney to San Francisco and everywhere in between, global shoppers are struggling to keep up with the increasing cost of living. Inflation is leading to rising costs for food, fuel and heating, leading to serious consequences for businesses and consumers alike.
In the shadow of the current downturn, Mirakl aimed to understand how the economy is shaping purchasing decisions on an individual level. How are consumers responding to rising prices? Where are they going in search of better value? And how can this information help retailers to more successfully navigate these choppy economic waters?
Mirakl’s recently released Consumer Preferences in the Digital-First Economy surveyed almost 10,000 global consumers from 16 countries. Here are some of the key takeaways from the report.
We Have All Become ‘Value Shoppers’
Consumers are motivated to make purchases for any number of reasons: brand loyalty, faster shipping, personalized recommendations and, of course, price. But with inflation putting a squeeze on household budgets, consumers across the globe have a renewed focus on cost savings. Mirakl’s recent survey found that 89 percent of all respondents are now looking for better value when shopping as a result of inflation. Additionally, 72 percent say they held off on making a purchase during the last 12 months due to higher prices.
When everyone is a value shopper first, retailers must change the way they approach the competition. Every brand must compete on price in addition to other less tangible factors. The survey also found that value shoppers are more likely to consider buying refurbished or secondhand products, and they’re more likely to prefer online marketplaces where prices may be more competitive. Sellers, take note.
Loyalty Has its Limits
The fraying influence of loyalty isn’t a theory, it’s fact. Mirakl’s recent survey found that 43 percent of respondents stopped shopping with a specific retailer as a result of rising prices. Even more striking, just 17 percent of consumers continue to shop with the brands they trust regardless of price. In order to keep their loyal customers from falling off the brand ladder and looking for a less expensive competitor, retailers must introduce similar products at lower price points. Brand loyalty can’t afford to go on a budget.
Of course, this economic downturn won’t last forever. Brands need to maintain the playbook that allowed them to build loyal followings and drive customer lifetime value if they want to be prepared for success when the economy recovers. Global consumers continue to prize convenience and customization — expect that to remain the case once inflation begins to ease.
A Vision for 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, even in spite of the economic headwinds, because of the value they find through e-commerce. Much of that spending will be focused on marketplaces. Marketplace spending increased 10 percent in 2022 vs. the prior year. Furthermore, 94 percent of consumers report that they’ll maintain or increase their marketplace spending in the future.
Even so, we’ve seen repeated cycles of boom and bust over the last 15 years, and only those brands that are able to roll with the punches have been able to thrive. According to Mirakl’s consumer survey, the future of e-commerce should see more personalization and a host of new marketplace features. More than half (56 percent) of respondents say they would be more likely to shop on websites that can offer personalized recommendations. Shoppers are also interested in loyalty and membership programs, purchasing integrations with social media apps, and curated product selections from influencers to enhance their marketplace experience.
Inflation has left online retailers with little margin for error. But by listening to their customers and making shrewd adjustments, e-commerce leaders can survive the downturn and position themselves for a rapid recovery.
Adrien Nussenbaum is the co-founder and co-CEO of Mirakl, a SaaS solution chosen by leading enterprises worldwide to manage their third-party marketplace and dropship business.
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