Once the country opened up for business, many businesses expected consumers to come flocking back. And in some cases, they did. But in other cases, they didn’t. A report from Alchemy Worx, a full-service international digital marketing agency conducted by third-party research firm YouGov, shows most American consumers were spending cautiously.
The just-released 2021 Consumer Spending Snapshot reveals “the key factors currently motivating consumer shopping decisions and the stark generational differences in purchasing behavior. And Alchemy Worx says the survey “illuminates why businesses need to hone their messaging to reach the right consumer at the right time or risk losing them altogether.”
Here’s a deeper look at the data.
At this moment, most consumers need to be “coaxed” into making purchases—51% say they’re currently only buying “essentials.”
Current Consumer Buying Behaviors
When asked how they’re feeling about spending money right now, the highest-ranking sentiments were cautious (43%), mindful (34%), and hesitant (26%). But, looking ahead, they’re eager to rejoin the world over the next six months. Travel is top of mind, with 32% planning to travel to see family and friends and another 32% planning to take a vacation.
So, the good news is that while consumers are not spending yet, that will change over the next six months. However, cautions Alchemy Worx, businesses need to understand that the ways consumers plan to make purchases have changed. Of those consumers planning to make a purchase in the next six months:
- 46% are more likely to make a purchase for someone other than themselves
- 43% plan to treat themselves to something they’ve wanted for a long time
- 27% will avoid businesses that aren’t ethical or sustainable
The Generational Breakdown
Alchemy Worx says businesses need to realize they “can’t talk to all customers the same way—especially when it comes to younger audiences. These new generations of shoppers have major purchasing power and different shopping habits than their parents and grandparents.”
Here’s what you need to know about generational shopping habits.
Gen Zs (ages18-24) are excited to spend big, with 20% saying they’re finally ready to make a big purchase they’ve been considering. However, among those who plan to make that purchase in the next six months, 42% say they plan to avoid doing business with companies that aren’t ethical or sustainable.
Alchemy Worx POV: While businesses need to focus on capturing GenZ’s enthusiasm, they also need to reemphasize their environmental commitments to be most effective.
Millennials (ages 25-40) are eager, at this very moment, to jump into the spirit of the summer and spruce up their homes. Of the millennials who plan to buy something in the next six months, 25% plan to make an impulse purchase just “because it’s summer.”
Alchemy Worx POV: These purchases may skew towards the home because a good number of millennials want to show they’ve “made it.” Of those who’ve already made or plan to make a “made it” purchase, 28% want to buy home accessories, and 23% want to specifically purchase high-end kitchenware.
Gen X (ages 41-56) wants to make the most out of the opportunity to travel, with 51% planning to travel to see family and friends or take a vacation in the next six months.
Baby boomers (ages 57-75) are thinking positively, with 13% saying “optimistic” is the best way to describe how they feel about spending money right now. They’re also feeling altruistic—51% of those planning to make a purchase in the next six months plan to buy something for someone other than themselves.
Don’t Ignore the Basics
Some factors do influence all generations. The biggest mistakes (“fails”) businesses make that impact consumer loyalty are:
- Receiving communications from a business after opting out or unsubscribing—39%
- Being lied to about sales or stock levels to try to convince them to make a purchase—37%
- Receiving too many emails from a company—35%
- Items arriving so late they forgot purchasing them—34%
- Receiving too many text messages from a business—34%
Alchemy Worx says it’s no longer good enough to just have an unsubscribe button on your messaging when communicating with your audience. Instead, they say, the make-or-break tool for success is audience management. That means taking a deep dive into learning who your business is communicating with, how they want to be communicated to, their activity, and more is crucial. Alchemy Worx says, “Incorporating audience management ultimately drives brand loyalty more than anything else. And that is more worthwhile to any [business] than wasting money on text campaigns that aren’t working or sending out mass emails that are just waiting to be deleted.”
There’s a lot to digest here, and things may shift (again) if the coronavirus outbreak escalates. If you need help navigating this uncertain path, a SCORE mentor can help. Find one today!