New Research Finds Majority of US and UK Consumers Believe Economy Won’t Improve in 2023; Shoppers Reducing Spend in Half of Retail Categories

SheerID today announced the findings of a survey designed to understand how the current economy is impacting consumer’s spending habits. The survey also sought to understand how shoppers felt about the downturn, how their purchasing behavior has changed, and what brands can do to engage, acquire, and retain them. This new data comes from a survey of more than 4,000 consumers in the United States and the United Kingdom that was conducted by market research software provider, Centiment in January of 2023.

The psychological and financial impact of economic uncertainty
The survey found that nearly 70% of United States consumers – and 76% of consumers in the United Kingdom – expect the current economic downturn to last more than 12 months. And in response to higher prices, higher interest rates, and their bleak outlook on the financial future, more than 90% of shoppers are reducing or changing their spending habits. Specifically, they are spending less (50%), eating out less (48%), tightening their budget (48%), purchasing fewer non-essential items (45%), and shopping with less expensive brands (38%).

The majority of consumers also said they were spending less in more than half of the categories they were asked about – spending less on software (50%), travel (51%), furniture (52%), apparel, footwear, and accessories (53%), gaming (53%), electronics (54%), take-out/food delivery (62%), and craft/home improvement supplies (72%).

What consumers want from retailers
Survey respondents revealed that they are inspired to purchase from retailers who create an emotional connection with them while also providing price relief.

When asked what would motivate them to try a new brand, 66% indicated “an exclusive discount for my community” is the preferred option. This was by far the most popular tactic, beating out a general discount (55%), better customer service (37%), access to buy-now-pay-later financing (26%), and even personalized offers based on interests collected from their website activity (19%).

Needs of consumers vary by affinity group
All consumers like discounts, but the survey revealed that consumers who belong to communities they strongly identify with found exclusive offers for their group more compelling – 62% of students, 65% of the military, and 78% of teachers said receiving a special discount for their communities would motivate them to try a new brand.

Brand generosity inspires emotional engagement and customer acquisition

More than 60% of all the consumer communities surveyed said they feel more emotionally connected to brands that give them an exclusive offer. Surveyed students said they feel excited (58%), while other communities – healthcare workers (58%); teachers (63%); first responders (63%); and military (63%) feel appreciated.

Consumers are loyal to brands that reward them for the groups they belong to
Survey results indicate that exclusive offers plant the seed for tremendous brand loyalty. More than 70% of consumer communities – including 91% of teachers – said they would likely join a brand’s loyalty program to receive an exclusive offer.

That seed of loyalty grows into a deep commitment to the brand. Seven in ten consumers belonging to identity-based communities said they are more loyal to brands that give them an exclusive offer. And exclusive offers turn consumer communities into brand advocates at an even higher rate. More than 9 in 10 said they would share an exclusive offer with others who were eligible for it.

“There’s no question that the down economy has stoked consumer pessimism and chilled spending, but these findings give brands a clear path to engage shoppers,” stated Jake Weatherly, CEO of SheerID. “Providing consumers with an exclusive offer based on the group status that they are proud of is a tried and true strategy for meeting both their emotional and financial needs. And when brands do that they attract and retain loyal customers in good times and bad.”

Survey Methodology
SheerID engaged the market research software provider Centiment to survey 4,000 individuals, including students, teachers, military members, first responders, healthcare practitioners, and others. Centiment provided the pool of qualified panelists to answer the survey. Panelists sign-up to provide their feedback in exchange for a monetary reward. As part of the panelist onboarding process, they are run through a series of security checks prior to reporting profile data that the company uses to invite them to be qualified.
Source: SheerID