Inflation Forcing 9 in 10 U.S. Consumers to Adjust Spending Habits, Study Finds
New Bread Financial study highlights consumer trends and sentiment around inflation as well as the new “average” shopper and evolving digital habits ahead of upcoming holiday season
COLUMBUS, Ohio – October 25, 2022 – Bread Financial (NYSE: BFH), a tech-forward financial services company that provides simple, flexible payment, lending and saving solutions, today released a new study that showcases the many ways consumers shop, pay and engage with their favorite brands in a post-pandemic economy. The State of the American Shopper creates a modern baseline for retailers to better understand today’s average consumer.
As more Americans feel the pinch of inflation, 92% of U.S. consumers have made significant adjustments to their financial habits, including prioritizing convenience and cost-savings, the report found. The top changes consumers are making include: focusing on spending less overall (43%), cutting back on non-essentials (42%), making fewer trips to the store (37%), shopping for sales/promotions (36%) and buying store brand or generic products (35%).
The study also found that despite 40% of consumers reporting they are spending more this year, two-thirds (70%) are fairly to very confident that they are on the right track financially, indicating confidence in the adjustments they are making to their spending and saving habits.
Additional noteworthy findings from the report include:
- Meet the new “average” shopper: According to the study, today’s average consumer is a 38-year-old female millennial who lives in the suburbs and has a household income of $67,521.
- Life stage impacts inflation adjustments and economic outlook: The study found parents and students are most focused on increasing their savings (51% and 60%, respectively), however retirees are prioritizing staying current on bills and living expenses, with almost seven out of 10 (67%) citing it as a top concern. Meanwhile, younger adults and parents are generally more optimistic about the economy – with 60% rating it as good to excellent – whereas only 32% of retirees had the same outlook.
- Cash is king among younger generations, but credit remains strong with Boomers: Sixty-seven percent of students said cash was the top way they plan to pay for purchases under $500, compared to 57% of retirees. When it came to purchases over $500, credit was the top payment method for the retiree population (46%), compared to 32% of students.
- E-commerce and mobile continue to pick up traction: 87% of consumers across all demographics shop digitally at least some of the time, with nearly 60% saying they shop online half of the time or more. Digital marketplaces like Amazon and Ebay are still the top destination for shoppers, but consumers are also shopping directly from retailers online.
With inflation maintaining at elevated levels, retailers are adjusting their marketing and promotions going into holiday. The data reported in our study uncovered actionable opportunities for retailers to reach today’s consumers, including offering multiple payment options and meeting customers where they are in their shopping journey. Inflation and a potential recession will continue to weigh on consumers’ minds and therefore wallets, so brands should focus on tailoring their messaging to a value-driven customer base and ensure their payment options match their customers’ needs.
Val Greer, EVP and Chief Commercial Officer at Bread Financial
To access the full State of the American Shopper report, visit: https://newsroom.breadfinancial.com/state-of-american-shopper
Bread Financial conducted a two-phased approach to produce the State of American Shopper study. Quantitative research was driven by a survey of more than 5,000 American shoppers in Q3 2022 to analyze and validate shopping habits based on life-stage including students, parents, singles and retirees based on preliminary guidelines.
About Bread Financial
Bread Financial™ (NYSE: BFH) is a tech-forward financial services company providing simple, personalized payment, lending and saving solutions. The company creates opportunities for its customers and partners through digitally enabled choices that offer ease, empowerment, financial flexibility and exceptional customer experiences. Driven by a digital-first approach, data insights and white-label technology, Bread Financial delivers growth for its partners through a comprehensive product suite, including private label and co-brand credit cards, installment lending, and buy now, pay later (BNPL). Bread Financial also offers direct-to-consumer solutions that give customers more access, choice and freedom through its branded Bread Cashback™ American Express® Credit Card and Bread Savings™ products.
Bread Financial is an S&P MidCap 400 company headquartered in Columbus, Ohio, and committed to sustainable business practices powered by its 6,000+ global associates. To learn more about Bread Financial, visit BreadFinancial.com or follow us on Facebook, LinkedIn, Twitter and Instagram.
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