Consumer spending habits change all the time under the influence of a wide variety of factors, from economic conditions and income to cultural norms, attitudes, and beliefs. There are periods when people spend a lot of money, as happened in the wake of the global health crisis when consumers engaged in revenge spending, and periods when they tighten their belts and are more careful about the purchases they make, as is currently the case with US citizens.
Americans’ shopping habits are undergoing a notable shift at the moment which points towards a spending slowdown. To understand better what’s prompting American shoppers to change their behavior and find out what they’re spending their money on, we’re going to take a look at some recent statistics and reports.
Splurging or saving?
Americans love to go out to eat or order takeout. It’s a cultural custom that they’re very much fond of and remains a routine experience for a large percentage of the population – an Empower survey reveals that most will eat at least one in five meals outside the home, with dinner being the most frequent choice for going out. Younger generations, especially Gen Z, are more likely to dine out than their elders.
However, the study also shows that, should they want to reduce their spending, going out is one of the expenses that people are willing to cut back on, along with driving. According to the data, in light of fluctuating gas prices, Americans are reassessing their driving habits, choosing to run multiple errands in one single trip (66%) or walking instead of driving if they only have to travel short distances (41%). Also, 29% have cut back on their restaurant visits to save money.
Discretionary spending is still going strong
Just because Americans seem to be less willing to splurge doesn’t mean they’re giving up on non-essential items. On the contrary, the majority still have a budget for discretionary expenses which allows them to treat themselves every now and then. The emotions that take over people’s wallets and bank accounts and push them to purchase non-essential items vary, ranging from celebratory joy (32%) to boredom (25%) or job stress and burnout (20%).
Therefore, one can just as easily be motivated to spend by the idea of buying gifts for a special occasion as they are by the need to cope with work stress or the desire to fight off boredom and add a bit of color and thrill to their life. For this reason, gift shops see a constant influx of shoppers. For example, Funko, the pop culture collectibles company that provides a wide variety of fandom-inspired gifts, including various Dragon Ball Z collectibles and many other popular figures, continues to attract a high number of clients.
As for the frequency with which Americans indulge in retail therapy, the vast majority (42%) limit themselves to one treat a month. Another 21% find it harder to resist the temptation to treat themselves and have a larger budget for discretionary spending, purchasing non-essentials on a weekly basis.
Financial peer pressure
The internet has an undeniable impact on people’s financial lives, shaping their perception of wealth and influencing their spending habits, and the study’s results demonstrate just how strong this impact is. It’s not just about the ease of access and the availability of goods that is changing the way consumers shop and manage their finances, but also the displays of wealth they see on social media which pressure them into doing the same.
This constant signaling of financial status that the online presents triggers negative feelings for 47% of Americans, while 45% remain neutral in this respect. Moreover, 24% of Gen Z responders said they are feeling compelled to flaunt their wealth and well-being on social media and maintain an image of financial success, even if it’s just a façade and nothing more.
Final considerations
It’s difficult to maintain a perfectly balanced life financially in a time where economic conditions keep changing rapidly and messing up people’s plans. The large number of factors influencing spending behavior make it even more difficult for consumers to achieve financial stability, as shown by recent studies.
While the US economy is nowhere near the recession that experts warned about last year, it’s still a pretty rough terrain for American consumers to navigate. This should serve as a warning signal to practice caution and be disciplined when it comes to spending.
