New research has verified what many retailers already suspect or know to be true – customers are becoming more cautious with their spending as prices increase and household finances tighten.
A study of over 2,000 UK consumers conducted by Sampl found that 83% say their shopping is noticeably more expensive than it was a year ago, with a third (33%) reporting they are now less willing to try new products as a result. Nearly half (46%) actually dread going shopping because everything is so expensive.
The squeeze on household finances is particularly affecting younger people, who typically have lower earning power than older demographics. More than half (51%) of 18-24-year-olds surveyed and 46% of 25-34-year-olds admitted to being reluctant to experiment and discover new products – significantly higher than the average of 33%.
“UK consumers – and particularly younger shoppers – are being costed out of trying new things,” said Matt Huntly, CEO of Sampl. “It is clear that people stick to what they know when times are hard. With consumers feeling like they simply can’t afford to get it wrong, the challenge for brands is to ensure that product discovery doesn’t disappear altogether.”
Opportunity for retail
However, the research highlights an opportunity for retailers. 62% of those surveyed said they’d be more likely to try a new product if they received a free sample. “[Brands] need to remove the risk, put the product in peoples’ hands and give consumers the confidence to try something new,” Huntly said. “Using strategies such as sampling or cashback to help convert hesitation into action and remove risk to consumers.”
As household finances tighten and pressure on retail margins mounts, retailers will need to look outside the box and continually innovate to stay ahead. “Those brands that can find new ways to break through will be the ones that drive growth – even when we are counting our pennies more closely than before,” Huntly added.
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