As the cost of living crisis continues to take a toll on UK purchasing, customers are being forced towards bargain brands and secondhand markets, according to a new analysis published by Cardlytics.
According to the report on the state of retail spend published by the advertising platform, more than half of consumers intend to shop at discount homeware and fashion brands in 2019. In addition, there has been a significant increase in the number of shoppers turning to online marketplaces that sell previously owned goods.
Spending at discount shops was up 12 percent over the same period in 2021, making it the sector that experienced the most growth in the first half of 2022.
In the meantime, secondhand platforms also reported an increase in spend of seven percent, with an average increase of six percent in the number of transactions made on relevant platforms. Alongside the rise in total purchases, each industry has also witnessed an increase in the amount spent by each individual customer.
According to Cardlytics, customers are expected to spend approximately 207.63 pounds on second hand markets in 2022. This is a substantial increase of 482% compared to the typical amount spent in 2019, which was 35.67 pounds.
According to the analysis, this pattern is very likely to continue because consumers are becoming increasingly conscious of the environmental impact of their purchase decisions as prices continue to climb. Retailers are obligated to make investments that will sustain customers over the long run.
It was also discovered that consumers favor high street brands over designer labels, which led to a seven percent decline in spending on designer labels during the first six months of this year.
Approximately sixty percent of customers reported that they intended to spend less on luxury products in the upcoming year, while forty-eight percent reported that they intended to switch to brands that were more affordable.
It was reported that high street stores were profiting from consumers’ shift away from designer brands, with spending and transactions at high street clothes brands increasing by 11 percent. This occurred despite the fact that the economic crisis is still ongoing.
“There’s an opportunity for retailers to invest now, to support consumers longer term,” Dawn Reid, vice president of advertising partnerships at Cardlytics, said in a release for the report.
“Whether through investing in price and discount ranges, value-focused marketing, or loyalty schemes, brands can put money back into the wallets of their loyal customers and help build longer term brand affinity.”
“Brands who are able to build and maintain their consumer base now, when circumstances are bad, will have the best chance of succeeding in the future.”
Reference:
“Consumers Are Favouring Secondhand Marketplaces amid Cost-of-Living Crisis.” FashionUnited, 8 Nov. 2022, https://fashionunited.uk/news/retail/consumers-are-favouring-secondhand-marketplaces-amid-cost-of-living-crisis/2022110866100
