Consumers Are Excited to Shop in Stores Again as Inflation Moderates
Key Takeaways
After taking a dip due to the compounding effects of inflation, supply chain jams and labor challenges, store enjoyment is on the rise. In March, 59% of store shoppers said they enjoy the experience, up 10 percentage points from a series low in January 2023.
Physical stores create an inherent sense of trust with consumers; They’re consistently rated as more trustworthy than brands that only sell online.
Gen Z does not trust e-commerce only brands, but that doesn’t stop them from shopping.
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A little over a year ago we published a memo discussing the decline of shopping enjoyment and consumer trust due to inflation. Well good news, inflation is moderating, and shopping enjoyment and trust are back…somewhat. Store enjoyment is trending upward particularly among high income households, given their relative insulation from the pain of paying inflated prices. Trust has rebounded for brands with brick-and-mortar stores, but e-commerce sites continue to struggle, particularly with Gen Z.
In-store shopping enjoyment is on the rise, particularly for high income households
Shoppers’ enjoyment of stores is rebounding after taking a hit amid peak inflation. Those who prefer in-store shopping chiefly say that they enjoy the experience. Seeing enjoyment rise again is good news, but inflation is only part of the story. Many retailers are still struggling to deliver a great store experience due to inadequate staffing and inventory. If this persists long term, more shoppers will turn away from the stores that can’t deliver.
Store shopping enjoyment rebounds as inflation cools
In that context, it isn’t surprising that high- and middle-income shoppers’ enjoyment of stores is higher than that of low-income shoppers. They’re more insulated from the effects of inflation and are shopping at stores that put a greater emphasis on the store experience. The psychographic profile of middle-income shoppers looks more similar to that of high-income, but behaviorally they tend to be more similar to low-income consumers.
Trust in stores has rebounded, but e-commerce continues to struggle with low trust
Trust in traditional retail is notably high and very stable over time, though it took a dip as retailers raised prices to account for inflated costs. E-commerce is a different story, and not without reason: Ever been burned by an online purchase or a less-than-generous return policy? E-commerce marketplaces are rife with low-quality products bolstered by fake reviews, and those bad actors drag down trust for the entire e-commerce ecosystem.
E-commerce trust lags trust in brick-and-mortar stores
Still, online sales continue to grow at double digits, so the lack of trust isn’t necessarily a drag on growth. As more brands introduce return fees, however, it could push more risk-averse shoppers away to brands with more flexible policies.
Gen Z’s demonstrates the lowest trust in online-only brands, but they shop anyway
Counterintuitively, Gen Zers trust online-only stores less than older generations do, despite growing up with the internet at their fingertips. This is likely because they’ve had more exposure to online shopping, not less, but they accept the increased risk that comes with not being able to see a product in person before adding it to an online cart.
Gen Zers notably have low trust in online-only brands
Still, Gen Z overwhelmingly prefers to shop in stores, though teenagers are more channel agnostic than Gen Z adults. Millennials are the generation most inclined to online shopping options. They place an extremely high value on convenience, and they’re in a busy life stage, balancing parenthood, careers, and increasingly caring for aging relatives.
