Consumers are the key to making sustainable investments through their purchase decisions. However, in today’s economic climate, they have to balance a number of priorities. Home improvement and decor spending has gone up since the pandemic, with more people working from home and making changes in their homes due rising housing costs, but spending on apparel is down (Nishimura, 2022). Understanding current trends for how consumers decide to use their discretionary income will help brands and retailers to respond accordingly.
Influences on consumer spending
Of course many factors influence how consumers spend money. Consumer confidence is down this year, with Cotton Incorporated’s 2023 Inflation and Supply Chain Survey (Wave 4) showing that seven in 10 consumers are “very concerned” about the economy and 53% of consumers feel that inflation and the economy are impacting them more acutely than a few months ago. This is clear in the fact that 38% of consumers spent less on clothes in January, and 76% state they plan to reduce their spending on clothing in coming months. Consumers are feeling the impact of higher prices in areas including gasoline, groceries and household items, and housing (Salfino, 2023).
That said, many are prioritizing sustainability. A First Insight/Baker Retailing center report found that two-thirds of those surveyed said they would pay more for sustainable items, and nearly three-quarters value a product’s sustainability over brand name (Salfino, 2022). U.S. Sustainability Research found that among consumers, Millennials make the greatest effort to purchasing apparel made of environmentally-friendly materials at 39%, with Boomers at 27%, Gen X at 24%, and Gen Z at 21% (Salfino, 2022).
A report by YPulse found that 58% of Gen Z and 47% of Millennials feel that brands should create more eco-friendly products. The report also states, however, that while many want to purchase more eco-friendly products, they care more about price (Salfino, 2022).
Global shopping trends
Consumer shopping habits are being adjusted worldwide. In the US, 48% of consumers are putting off purchasing clothes for themselves. They are shopping differently as well, with 56% shopping online to avoid going to the store, 44% taking better advantage of sales, discounts, and promotions, and 44% buying generic brands (Cotton Inc., 2023).
In Mexico, 43% of consumers are putting off buying clothes for themselves. Fifty percent are taking better advantage of sales, discounts, and promotions, 37% are spending more time researching before making a purchase, and 37% are buying less of things they want (Cotton Inc., 2023).
In China, 53% of consumers are shopping online, 47% are taking better advantage of sales, discounts, and promotions, and 32% are spending more time researching before buying (Cotton Inc., 2023).
Influencing the future
Consumers are becoming more opinionated, aware, and focused, and brands and retailers must therefore become more customer-centric. This means prioritizing comfort, convenience, and quality (Varma & Joshi, 2023), along with price and sustainability.
Consumers make choices each day, and those choices can impact the future of product development. At the end of the day, it is up to the consumer to decide what their preferences are and to spend accordingly.
References
Cotton Inc. (2023). Things to know about consumers and inflation-Wave 3. Lifestyle Monitor. https://lifestylemonitor.cottoninc.com/topic/economic-data-news/
Nishimura, K. (2022, April 14). Inflation frustration: Discretionary spending seen falling sharply. Sourcing Journal. https://sourcingjournal.com/topics/consumer-insights/covid-inflation-consumer-spending-apparel-footwear-home-economy-retail-alvarez-marsal-339335/
Salfino, C. (2022, April 14). Guess which generation wants sustainable clothes the most? Sourcing Journal. https://sourcingjournal.com/topics/lifestyle-monitor/sustainable-clothes-gen-z-millennials-first-insight-natural-fibers-cfda-339432/
Salfino, C. (2023, February 9). How is the economy affecting apparel shoppers? Sourcing Journal. https://sourcingjournal.com/topics/lifestyle-monitor/economy-apparel-shopping-conference-board-saks-off-5th-revenge-spending-416123/
Varma, K. & A. Joshi. (2023, February 20). Consumers trends that will shape 2023. Forbes. https://www.forbes.com/advisor/in/personal-finance/spending-tips-for-consumers/
