When it comes to consumer spending behaviours, holding back on or stopping altogether non-essential buying is what people do today, according to the 2023 PwC Global Consumer Insights Pulse Survey.
The firm said it surveyed 9,180 people across 25 territories worldwide from October 24 to November 16 of 2022 via a 15-minute online quantitative survey on consumer spending behaviours.
As the cost of living crisis continues to rise globally, consumers have drastically adjusted their spending behaviours, with the majority (53%) of global consumers “holding back” on non-essential spending, PwC noted.
In addition, 15% of consumers have stopped non-essential spending altogether, PwC added.
Survey highlights
- The majority of consumers expect to reduce their expenditure across all surveyed categories over the next six months, a significant decline in planned spend across all categories since the previous pulse survey, June 2022.
- Industries including luxury and premium products, travel, and fashion expect to see the greatest portion of consumer spend reductions over the next six months, whereas groceries is expected to decline the least.
- 49% of respondents say they are buying certain products when on offer/promotion; 46% are looking to retailers offering better value; 40% are using comparison sites to find cheaper alternatives; 34% are buying in bulk to save cost, and 32% are buying retailers ‘own brands’ in order to find savings.
- There is also a demographical difference in terms of consumer spending behaviours.
- Generation X is the “most-concerned” (47%) and has taken action on non-essential spend.
- Baby Boomers lead concerns to “some extent” (33%) while taking action, whereas Millennials lead the way when “concerned”, but not changing behaviour.
- While more than half of consumers (56%) said rising prices remains the most frequently experienced issue when shopping in-store, supply chain issues also dominate with larger queues and busier store locations (30%), as well as product availability (26%) impacting consumer behaviour.
- Supply chain disruptions for in-store shopping appear most prevalent for consumers in Australia (36%), United States (35%) and India (34%).
- For online shoppers, rising prices (48%), product availability (24%), and longer than expected delivery times (24%) lead reported concerns.
- Luxury/Premium product industry to see the greatest decline in consumer spend
- Consumers are planning to reduce their spending across all surveyed retail categories over the next six-months, with the greatest decrease forecast in luxury/premium products or designer products (53%), travel (43%), virtual online activities (42%), and fashion - such as clothing and footwear (41%).
- However, there still remains an appetite for future spend, with 40% indicating they will look to treat oneself/others, whereas 39% view them as better quality.
- Groceries (24%) had the least reported planned reduction when it comes to consumer spending behaviours.
- Despite a planned spend reduction and a challenging economic environment, consumers say they are still willing to pay more for sustainable product types.
- Overwhelmingly, more than three-fourths (78%) are willing to pay higher for a product that is produced/sourced locally, or made from recycled, sustainable or eco-friendly materials (77%), or produced by a company with a reputation for ethical practices (75%).
In-store vs online shopping
- In-store shopping remains largely stationary year-on-year as the most common medium of consumption in 2022 (43%), whereas use of mobiles/smartphones (34%), PCs (23%), and tablet consumption (15%) have all marginally declined.
- The survey finds there is a continuing trend in consumers stating they never purchase products via tablets (51%), smart home voice assistance (64%) and wearable devices (71%).
- Adoption of the Metaverse as a shopping channel is still in its early stages of adoption, however the medium still remains under-utilised, with only one-quarter (26%) of respondents having used the platform for entertainment, virtual experiences or purchasing products in 2022.
- The largest portion of these users have primarily employed the Metaverse for virtual reality (VR), i.e, playing games or watching a movie (10%), joining a virtual world, i.e, experience a retail environment or concert (9%), or purchasing a digital product, such as a Non-Fungible Token, or NFT (9%).
- Those most likely to engage in metaverse-related activities: India (48%), Vietnam (43%), and Hong Kong (42%), as well as Millennials (36%).
- All the while, as on-line shopping continues to grow in volume, consumers are increasingly weary of data privacy.
- Almost half (47%) say they are extremely or very concerned when interacting with social media companies, third-party/portal travel websites (36%), healthcare (34%), and consumer companies (32%).
- Countries including India and the Philippines are most concerned across such categories. As a result, almost half (49%) say they don’t share more personal data than they have to, 32% opt-out from receiving communications from these companies, and 26% have overall reduced their interaction with these types of companies.
