Consumer stress levels and mental health concerns amid inflation have jumped nearly 50 percent from just a few months ago, which will create unique challenges for brands and retailers this holiday season, reveals new consumer research from Vericast.
The firm conducted a survey of 1,000 adults in the U.S. to continue assessing consumer behavior changes during inflationary times. Nearly 75 percent of consumers surveyed indicated that shopping amid high costs and product delays is negatively impacting stress levels and mental health. The study also found that almost all (95 percent) are concerned that inflation will negatively affect their financial situation heading into 2023.
The study also found that high prices still weigh heavy on the minds of consumers across generations—especially Gen Z—heading into this holiday season. Gen Z is the most impacted, as 79 percent agree that their mental health is negatively affected by rising prices, up 58 percent from May 2022. Gen X and millennials were not far behind, at 78 percent and 77 percent, respectively, representing an increase of 37 percent and 20 percent.
As a result, consumers are utilizing different ways to afford the season, including eating out less, streamlining Thanksgiving dinner, switching to less expensive private label brands, and seeking the best deals in several forms of media. Financing options, such as credit cards and layaway, are the preferred method for 57 percent of shoppers to navigate the high holiday prices this year. In addition, over half (59 percent) say they’re going to eat out less over the next couple months.
Previous data by Vericast found that 70 percent of consumers surveyed are lacking confidence in the ability to pay bills and purchase necessities. Brands have an opportunity to boost consumer loyalty by offering cost-saving deals through the channels consumers find most impactful. Brands can mitigate the loss of customers through meaningful print and digital offers—across all channels—or fine tune rebate programs.
“Survey results continue to point to another rocky holiday season and brands have an opportunity to help their customers get through it,” said Chip West, director of category strategy, national sales at Vericast, in a news release. “What is typically the biggest selling season of the year will also be the toughest. Consumers across demographics have been hit by inflation and are ramping-up value-seeking behaviors. Brands that offer deals and incentives online and offline will stay competitive this holiday season, catch shoppers’ attention, and price conscious customers.”
Additional survey findings include:
Shoppers are looking to save money this holiday season and will switch brands to do so
- Over half of consumers (57 percent) plan to cut back on spending for Thanksgiving dinner and 74 percent say they would be motivated to buy Thanksgiving ingredients from a new brand if they were offered a deal.
- Coupons are the top way holiday shoppers plan to save money this year, followed closely by holiday deal days, such as Black Friday, and redeeming cash back rewards
Retailers can retain brand loyalty and win new shoppers through deal days and coupons
- 56 percent of shoppers will search online for Black Friday, Cyber Monday and Small Business Saturday deals
- Meanwhile, one third of Gen Z will look to TV ads to inform their Black Friday, Cyber Monday and Small Business Saturday shopping
- While over one third of consumers (38 percent) plan to holiday shop earlier due to concerns about product delays and price increases, late stragglers still want deals: 13 percent plan to shop later to have more time to save
When money can’t be saved, shoppers will lean in on several financing options
- If money is not available upfront, 40 percent will finance their holiday purchases with a credit card
- Inflation may revive the layaway model, as survey results indicate 14 percent of consumers plan to use this option for holiday purchases due to rising prices; another 21 percent plan to use buy now, pay later financing
To learn more about how the economic environment has forced adjustments by both consumers and retailers, read Vericast’s holiday blog on what to expect from consumers this holiday season.
