According to a new report by consumer research platform Attest, British shoppers are scaling back on their online shopping as the cost of living continues to rise. The study reveals that 26% of British consumers have reduced their online spending over the past six months, while 39% have maintained their spending levels. However, 34% of respondents admit to spending more, possibly in anticipation of future price increases. This suggests that the online retail industry, which saw significant growth during the pandemic, may now face difficulties due to the cost-of-living crisis.
The report also highlights a pessimistic outlook among British shoppers for online shopping in the upcoming six months. Nearly 28% of respondents believe that their online spending will decrease leading up to Christmas, while only 21% expect it to increase. This results in a net reduction of 7% of people who plan to spend less online. Even for the 50% who anticipate maintaining their current spending levels, the report predicts that their reduced spending power may result in fewer purchases. The age groups expected to experience the biggest decrease in online spending are the 35-44 year-olds, who are the most frequent online shoppers, as well as those aged 55-64.
The report suggests two possible explanations for this data. Either individuals believe that online shopping offers better deals compared to traditional brick-and-mortar stores, or they are anticipating having to spend more due to the rising cost of products.
In terms of online shopping habits, nearly 88% of Britons have made direct-to-consumer (D2C) purchases in the past six months, with an average of 3.9 purchases per person. The majority of people (28%) spend between £26-£50 per month, while 21% spend less. The remaining 49% spend over £50, although only 17% spend more than £100. Despite the cost-of-living crisis, Britons continue to shop online regularly, with 46% making at least one purchase per week and 21% doing so fortnightly. The age group that engages in the most frequent online shopping is the 35-44 year-olds, with 22% making more than one purchase per week.
The report also reveals that 68% of those with a strong commitment to online shopping prioritize technology, followed by clothing (61%) and health and fitness (57%). Smartphone shopping continues to gain popularity, with 59% of Britons stating that they most frequently use their mobiles for online research or purchases. This marks an increase from 51% in 2019. On the other hand, the use of laptops has declined from 24% to 20%, tablets from 13% to 10%, and desktop computers from 11% to 8%.
Interestingly, Britons are now more willing to wait longer for online deliveries compared to 2019. The percentage of people expecting delivery within a couple of days has decreased from 22% to 14%, while those prepared to wait more than five days has increased from 21% to 28%.
When it comes to starting their online shopping journeys, more shoppers now begin with a search engine (37%) compared to 2019 (34%). Marketplaces like Amazon, which previously held the top spot, have experienced a decline in popularity (from 37% to 33%). The report emphasizes the importance of investing in research, as fewer consumers are going directly to a preferred brand’s website for purchases (20% in 2022, compared to 24% in 2019). Social media has doubled in popularity as a starting point for online shopping journeys, rising from 3% to 6%. Among those aged 18-25, 13% use social media as their preferred starting point, indicating a growing trend that brands may benefit from by enabling shopping functions on their social media channels.
In conclusion, the cost-of-living crisis in the UK has had an impact on online shopping habits, with a significant portion of Britons reducing their spending or anticipating reduced spending power in the future. The online retail industry may face challenges as a result, and retailers should be prepared to adapt to changing consumer behaviors and preferences.
Useful links:
1. BBC: UK cost of living squeeze continues, says IFS
2. The Guardian: Price rises are creating the widest gulf in UK living standards in 70 years
