Has Inflation Passed COVID on the Consumer Worry List?
With all the coverage it has been getting recently, you might think ‘inflation’ is the name of a new cryptocurrency, or perhaps a hot new streaming TV service. Sadly, as consumers you and I both know this is not the case, as we’ve all seen prices on many of the items we purchase rise dramatically in the last few months.
For almost two years, there has been an understandably strong national focus on COVID-19 in general, and how that would affect our economy. Without a doubt it has had a huge impact; restaurants and stores went out of business, companies downsized, and overall consumers were just simply spending less. Now, however, Civic Science cites that concerns are more focused on inflation in the US rather than the newest COVID variant. In fact, 26% of adults 18 or older say they are very concerned about Omicron, whereas over half (52%) say they are very concerned about inflation.
Just take a trip to the grocery store and you’ll notice how much the prices have increased. So, what have consumers started to do to try to maintain their current lifestyles as inflation impacts their daily lives? Many have started by being more conscious about the items they buy. In Numerator’s September 2021 survey, 20% of shoppers said they would likely switch to a less expensive brand amid rising prices. Additionally, 17% said they would try a new retailer, and another 17% would wait to purchase a product until there is a promotion or coupon. It is no surprise that brand loyalty has essentially taken a back seat to whatever product is more affordable at that specific time.
With inflation rising, consumers’ focus has shifted to a “less is more” approach. Mintel notes that 57% of consumers are striving to reduce the amount of goods they own or buy. When consumers are shopping, there is now not only a huge focus on price, but sustainability has also become increasingly important. Secondhand and thrift stores have seen a huge boom over the past few months, especially with these types of stores now having an online presence. Consumers can get practically new or gently used items for a fraction of the price. Not only are consumers opting for more sustainable, less expensive options, but this approach has made its way into the business plans of big-name retailers. Companies are now finding ways to incorporate reselling at discounted prices into their businesses. CNBC notes that athletic apparel retailer Lululemon announced it would be releasing its own resale program, while ThredUp, an online secondhand store, struck various partnerships, including with Macy’s, to offer secondhand clothing at around 40 Macy’s stores. Even Etsy, which is known for being a handmade and vintage online marketplace, acquired Depop, a fashion resale app. It is no wonder that the resale and secondhand market is expected to reach $53 billion by 2023.
So yes, inflation is a growing concern for most consumers. However, with the plethora of brands and varieties of marketplaces, consumers still have a lot of purchase power to mitigate its impact. While all of us are hopeful that recent price spikes will be a short-term phenomenon, people will most likely be a bit more thoughtful before making discretionary purchases, and more mindful of the prices they’ll pay.
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