Monitoring consumer behavior is a valuable way to discover economic trends, understand spending patterns, and highlight ways retailers should align their strategies with consumer expectations. Earlier this summer, Upside conducted a comprehensive survey with over a thousand consumers to gain valuable insights into their spending and saving habits, as well as their preferences for rewards programs. In this blog post, we share three key takeaways that shed light on the factors driving consumer spending behavior for 2023.
In a world of fluctuating prices and economic uncertainties, it's no surprise that consumers are becoming increasingly mindful of their spending and saving habits. Our survey revealed that more than half of respondents actively monitor the inflation rate, demonstrating a keen awareness of economic trends. Furthermore, retailers may find cause for concern as the survey also indicated that over half of the consumers expressed their intention to curtail their spending over the next six months.
In the meantime, consumers are employing multiple strategies to save money as seen in the chart below. Being more mindful of their expenses and prioritizing necessary purchases ranking highest suggests that consumers are actively seeking ways to manage their finances more effectively.
Price shopping, the act of comparing prices among different retailers, has become a prevalent practice among consumers across various industries. Unsurprisingly, the grocery industry leads the pack, with a staggering 77% of participants indicating that they engage in price shopping when purchasing groceries. Additionally, 62% of respondents mentioned that they actively compare prices when looking for fuel, while 44% do the same when choosing restaurants. These statistics highlight the importance of competitive customer acquisition and retention strategies for businesses operating in these sectors.
Rewards apps and programs have emerged as a valuable way to shape consumer preferences and foster brand loyalty. A substantial 8-in-10 consumers say they have shopped at a specific store because of the rewards they offered. When shopping with a specific retailer that offers rewards, 56% said they’ll spend more with that retailer. These statistics underline the potential for businesses to retain customers and grow basket sizes by incorporating appealing rewards or partnering with a digital marketplace.
But not all “reward” types are created equal. Our survey found that two-thirds of consumers say the rewards' value is key in their decision-making process. And cash back stood out as the preferred offering for consumers. Our findings revealed that 3-in-5 consumers preferred cash back as their most desired way of redeeming rewards. This indicates that consumers are looking for immediate monetary benefits.
As retailers aim to thrive in today's competitive landscape, understanding these consumer insights is crucial for tailoring marketing strategies, designing loyalty programs, and identifying the right partners to help acquire and retain customers. By prioritizing cash back rewards, acknowledging the significance of price shopping, and leveraging the potential of rewards programs, retailers can enhance customer satisfaction, loyalty, and if done profitably, their bottom line.
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