Inflation Expected to Shrink Budgets, Not Participation, for Prime Day and Other Shopping Holidays
44% of shoppers expect to spend less during this year’s Prime Day due to inflation39% of shoppers feel they miss shopping holiday deals they’d be interested due to high-volumeYounger shoppers want more personalized deals during shopping holidays
July 12, 2022 at 12:00 AM Coordinated Universal Time
San Francisco - July 12, 2022 - Inflation is having a significant impact on consumers, with 83% noting that it has led to a change in their shopping habits this year, according to a new survey of 1,000 U.S. adults (18+) conducted by search & discovery platform Algolia. The change in behavior is not limited to day-to-day spending but is expected to also impact popular shopping holidays, such as Amazon Prime Day, Black Friday, and more.
FOMO on a Budget
It may seem counterintuitive in today’s market, but the number of people participating in Prime Day is expected to be the same as last year. Forty-four percent (44%) of survey respondents participated in Prime Day last year and 45% expect to make a purchase this year. The reason is that shoppers do see value in shopping holidays, like Amazon Prime Day and Black Friday, with 89% noting that they believe retailers display the best deals during these events; 32% even classified the deals as a lot better than regular sales. However, budgets will be smaller.
Due to inflation:
- 44% of shoppers expect to spend less during Amazon Prime Day this year compared to last year;
- 17% of shoppers plan to cut their Amazon Prime Day budget by more than 50%;
- Nearly half of respondents (47%) are also forecasting that they will be spending less during Black Friday and Cyber Monday as well.
While shoppers don’t want to forgo the experience of participating in shopping holidays and capitalizing on good deals, they are being much more calculated about the purchases they are making.
Preparation in the Face of Inflation
It makes sense that inflation and a decrease in purchasing power would lead to deal-seeking consumer behavior. Inflation was noted as a reason that 44% of respondents are browsing more online before making purchases and nearly one-third (32%) are purposely waiting for shopping holidays and annual retail sales to make certain purchases.
Purchases during shopping holidays are becoming more intentional. Eighty-four percent (84%) of respondents noted that they plan or research deals leading into shopping holidays and 58% keep an eye on specific items in case they go on sale during these events (a figure that rises to 62% when just surveying Millennials).
Personalization Needed to Navigate Deal DaysAnnual shopping holidays can be overwhelming for shoppers. Thirty-nine percent (39%) of respondents feel like they miss deals that they’d be interested in due to the high volume of offerings that occur on these high-volume shopping event days. Retailers that build personalization and recommendation into an e-commerce strategy can help ease these concerns.
Over a third of respondents (35%) said that they would like deals to be more personalized by retailers during shopping holidays; this concept is more widely embraced by younger shoppers. Millennials and Generation Z agreed at a higher rate of 41% and 43% respectively. A quarter (25%) also noted they rely on “similar products” recommendations to discover new items during shopping holidays. This concept was again more widely embraced by younger shoppers with 31% of Millennial and 30% of Generation Z respondents sharing that they rely on “similar products” recommendations during these events.
Although budgets are tightening for consumers, there remain strong opportunities for retailers around shopping holidays. Consumers still plan to participate in these events and visit retail sights seeking deals. Utilizing search, discovery, and recommendation technology to keep visitors engaged and surface relevant products will increase cart sizes while creating a more enjoyable customer experience.
To learn more about how to fine-tune your site in preparation for shopping holidays, visit here, or check out our case study featuring how Gymshark handled its crucial Black Friday period.
Algolia is an API-First Search and Discovery platform that empowers builders to compose experiences at Internet scale to predict what customers want with blazing fast search and the best application browse experience leading to more remarkable Discovery. More than 12,000 companies including Under Armor, Lacoste, Birchbox, Stripe, Slack, Medium, and Zendesk rely on Algolia to manage over 1.5 trillion search queries a year. Algolia is headquartered in San Francisco with offices in New York, Atlanta, Austin, Paris, London, and Bucharest. To learn more, visit www.algolia.com.