Impulse purchases are steeply declining as cautious shoppers navigate the cost of living crisis, reveals new research from ChannelAdvisor. In a study of 2,000 UK adults, nearly two-thirds (59 per cent) said they are making more considered online purchases than they did last year while a third are more likely to return online purchases.
Data reveals that while Brits are being more frugal with their spending, online shopping is still rising. ONS stats show that before the pandemic, internet sales made up 21 per cent of total retail sales, whereas in 2023 online transactions command 25 per cent of total sales.
However, free returns is a big deciding factor for shoppers before they buy. Over a third of respondents (34 per cent) said they wouldn’t purchase a certain items without free returns.
Prior to Covid, Whistl reported that the impulse buying market was worth over £3 billion every month. With two thirds of respondents giving more thought to their purchases than last year, retailers are looking for ways to respond. “When consumers are thinking harder before making a purchase, they are also more likely to spend additional time researching before they spend,” comments Vladi Schlesman, managing director for EMEA at ChannelAdvisor. “For brands and retailers, strong digital marketing is a must to put your product above the competition”
Considering the impact the cost of living crisis has had on personal finances, 81 per cent of respondents aged 45-54 said the cost of living had negatively impacted their bank balances (compared to 77 per cent overall). As a result, consumers are being left with little choice but to be more thoughtful and do more research to find the best option when making online purchases.
“The research found free returns to be a make or break feature when online shopping in the home sector,” adds Schelsman. “This is set against the backdrop of more retailers reviewing their returns policy as profitability is high on the agenda. While a move to paid for returns makes sense to the bottom line, we’d encourage brands and retailers to carefully consider how they structure their returns policy as this is proven to make such a difference to the customer experience.”