More than 1/4 of Brits have cut their online spending

A new report released today highlights that a significant portion of the UK public has turned to online shopping in the past six months.

New data from Attest, a consumer research platform for the world’s largest and fastest-growing brands, shows that more than a quarter (26%) of UK shoppers have reduced their online spending in the past six months. While the majority (39%) say they spent the same amount over the same period, 34% admit to spending more, possibly due to rapidly rising costs for all consumer goods sold online.

The next six months ahead

The research from Attest’s UK direct-to-consumer (D2C) report 2022 shows that the explosive growth seen by many online retailers during the pandemic is expected to be curbed by the cost of living crisis. It also finds a somewhat bleak outlook in UK consumer confidence for online shopping over the next six months:

• Expenses for some will decrease: Nearly 28% of people think that the amount they spend will decrease in the next six months, while 21% think it will increase, resulting in a net 7% of people spending less online.
• The majority probably have less purchasing power: And even for the 50% of people who say their spending will stay the same, their reduced purchasing power could mean they can afford fewer purchases.
• Some age groups are the most withdrawn: The biggest drop in spending will be seen in the 35-44 age group (who also happen to be the most frequent online shoppers), and in the 55-64 age group. Net 14% of both age groups predict a decline in spending in the coming months.
• 1 in 10 young people expect to spend more: The only age group that is bucking this trend is the 18-24 year olds, of whom a net 11% expect to spend more. There are two ways to interpret this data; either people think they prefer online shopping over the high street — perhaps as a way to find better deals — or they anticipate having to spend more simply because of the rising cost of products.

How UK consumers shop online

The annual report aims to provide a comprehensive picture of UK consumers and how they shop online. It found:

Spending Levels and Frequency

• Nearly 88% of Brits have bought D2C in the past 6 months, making an average of 3.9 purchases.
• The largest percentage of people (28%) spend between £26-50 a month, while 21% spend less than this. The remaining 49% spend more than £50 each month buying goods online (although only 17% spend more than £100).
• Britons currently shop online with great regularity; 46% buy items online at least once a week, while another 21% shop every two weeks. People aged 35-44 are the most frequent online shoppers (22% shop more than once a week).

What do they shop for and how?

• There are several categories in which Brits show a strong commitment to buying online; these are gifts (68%), technology (68%), clothing (61%) and health and fitness products (57%).
• On the other hand, there are things they clearly prefer to buy in the store, including groceries (67%) and pet products (47% vs. 33% who prefer to buy online).
• Smartphone shopping continues to increase; 59% of Brits say they use their mobile most often to research or make purchases online, up from 51% in 2019. All other devices are on a downward trend: laptops have fallen from 24% to 20%, tablets have fallen from 13% to 10% and desktop computers have fallen from 11% to 8%.

What they appreciate most

• With less money to spend online due to inflation, the bottom line is that people are looking for the best value possible. In fact, according to this research, price trumps all other factors, with UK consumers admitting that it is the most important factor in their purchasing decisions (with quality lagging far behind in second place).

D2C trends retailers need to know

Nearly a third think D2C means cheaper products

What is encouraging for D2C brands based on the data is the perception that they are cheaper than their high street counterparts; 31% of people believe prices are more competitive. Building on this perception is an important way for online retailers to gain an advantage as the cost of living increases.

Some of the public has become more patient for online deliveries

This year’s survey shows a surprising trend: some Britons are now willing to wait longer for their goods than in 2019. The percentage of people who expect to wait no more than a few days for delivery has fallen from 22% to 14% . Meanwhile, the number of people willing to wait longer than five days has risen from 21% in 2019 to 28% today. This may have been caused by the pandemic and ongoing supply chain problems, but brands shouldn’t be complacent about delivery; most people still expect their package within 3-5 days (57%).

Search engines become more important and hit Amazon

Comparing this year’s data to 2019, the percentage of shoppers who embark on a shopping trip through a search engine has increased from 34% to 37%. Previously, marketplaces were the main entry point, but Amazon’s power seems to have dwindled (from 37% to 33%). The need to invest in search is underlined by a reduction in the number of consumers going directly to a preferred brand’s website when they want to buy something. Only 20% of people say they are most likely to shop this way, up from 24% in 2019.

Social media is important, especially for young people

Search engines may become increasingly dominant, but that’s not the whole story. Social media has doubled in popularity as a starting point for online shopping journeys, from 3% to 6%. It’s still a small number, but it’s bigger if we focus on the young demographic; 13% of 18-25 year olds regularly use social media as a starting point. This suggests it’s a growing trend, so it makes sense for brands to enable store features on their social media channels.

Jeremy King, CEO and founder of Attest, said of the research:

“What is clear from this survey is that a significant section of British society has tightened their belts when shopping online in the past six months. The outlook for the remainder of 2022 is not much brighter for D2C brands as consumer confidence remains cautious in the face of a rapid rise in costs for all consumer goods.”

“It’s not all bad news, though, as the data shows how Brits have made D2C brands a part of their everyday shopping experience, with nearly a quarter of Brits making at least one D2C purchase every month. In addition, the data shows that nearly a third of UK consumers view D2C brands as more competitive in price than their high street counterparts. This perception could be a critical benefit for D2C brands as they seek to allay consumer concerns about lingering economic uncertainty and declining purchasing power.”