Retrieved from Piqsels.
By Tatiana Walk-Morris
Source: www.retaildive.com, October 2022

Dive Brief:

  • Signaling consumers’ budget concerns, a Jungle Scout Consumer Trends survey of 1,000 U.S. shoppers found that 25% of respondents are planning to purchase used items as gifts to reduce their holiday spending. Among the top ways shoppers are cutting back their holiday spending are paying less per person on gifts (54%), purchasing discounted items (47%), buying gifts for fewer people (38%), reducing their holiday decorating spending (36%) and cutting their holiday activities and travel (34%).
  • Eighty-four percent of survey respondents said inflation has affected their spending, a 9% bump from the second quarter. The survey also found that more than half of consumers (52%) said their household income is unstable, a 36% spike from Q2.
  • While survey respondents said they’re most likely to forgo gifting themselves, their friends and extended family, shoppers are least likely to cut the gifts for their children, grandchildren, and partners or spouses.

Dive Insight:

The trend of buying secondhand gifts for the holidays began before the COVID-19 pandemic disrupted the retail industry, but Jungle Scout’s research suggests that it has continued in light of consumers’ inflation concerns.

According to a 2019 Deloitte report, 61% of Gen Z consumers and 43% of millennials planned to give secondhand items as holiday gifts, compared to a quarter of Gen X and 13% of baby boomers who said the same.

Jungle Scout’s report echoes previous research indicating that consumers are turning to used goods to combat rising prices. In a ThredUp survey released in May, 44% of respondents said they are cutting back their clothing spending, more than every other category except dining at restaurants. The report said consumers had seen an uptick in gas, grocery, restaurant, household expenses and clothing prices. The U.S. secondhand market is expected to reach $82 billion by 2026, per the report.

Other research also suggests that consumers are changing their behaviors in response to high costs. A Morning Consult survey found that 79% of respondents were looking for deals and 77% had reduced their shopping. Eighty-five percent of respondents attributed their changing shopping habits to inflation.

But it’s not just consumers who are adjusting to rising costs. Retailers like Target, Walmart and Best Buy have all had to cut guidance as they prepare for consumers to spend less in response to inflation.