The fear of the pandemic and the economic downturn prompted consumers to cut back on their spending for a short while in 2020.
Nevertheless, the scenario has taken a shift this year and for the better. COVID-19 may still be around, but the implementation of vaccines has boosted peoples’ confidence globally.
As a result, consumer spending has risen by 8.1% in 2021 compared to a brief 3.8% contraction in the last year.
Since physical retail outlets frequently shut down due to the lockdown, people are transitioning to online stores – Amazon, Shopify, or other brand websites – to shop.
Consequently, e-commerce businesses have noticed a dramatic shift in consumer trends. Keep reading to hear what novel consumer trends we observed this year.
4 Consumer Spending Trends in 2021
Did you know around 75% of US adults shop online? That’s right, while this number is still more than people willing to visit a retail store, it’s expected to rise even more.
Global ecommerce sales are expected to hit $4.2 trillion in 2021.
Consumer trends have changed drastically; what and where people buy things has switched in ways we never imagined before.
Below, we’ve curated a list of top consumer spending trends in 2021.
Buy Now, Pay Later (BNPL) Model
The Buy Now, Pay Later business model is a game-changer, and ecommerce business owners know it right. With growing online shopping trends, retailers are giving flexibility to their buyers – utilizing the BNPL model.
A whip-smart business owner knows how to build loyal clients, and this strategy is just another way to do it.
Buy now, pay later allows shoppers to purchase items right away and pay later. This option comes in handy for customers when they need to make an emergency purchase.
What’s more, some companies offer this model with no interest, which is another plus.
This way, customers enjoy the flexibility of payment, and retailers reap the benefits all along. The model allows online business owners to:
- Entice shoppers to make bigger purchases
- Increase overall sales
- Earn loyal customers
- Raise customer lifetime value (LTV)
The percentage of Generation Z utilizing BNPL has grown six-fold from 6% to 36% in 2021. What else accelerated the growth is the flexibility of platforms like Amazon and PayPal.
Amazon shoppers are now allowed to split their purchases of $50 or smaller into monthly installments. PayPal, on the other hand, has stopped charging late fees on BNPL payments.
New General Buying Trends
It’s no surprise that consumer purchasing trends shifted during the pandemic. Online shoppers have reconsidered their spending patterns.
For instance, staying at home, for the most part, made many people beauty conscious. A study reveals that more people were interested in adapting themselves to a complex skincare regimen.
As a result, online shoppers bought more skincare and beauty products, and the trend has continued since then.
Increasing health concerns owing to the pandemic also gave rise to the purchase of health-related items.
Previously, we went to grocery stores to purchase items like pet food, household goods, cleaning supplies, beverages, and frozen food. Now however, more people have started buying these household items online.
Many people also showed interest in gardening as a hobby during the pandemic, and this trend continued to rise in a post-pandemic environment. Hence, there has been a surge in the purchase of gardening tools.
Though we cannot overlook the challenges of the COVID-19, the global crisis created opportunities for small businesses to grow online. Today, we’re increasingly buying small household items online that we never would have thought to purchase before.
Apart from specific online purchases, consumers have also started using fitness, health, and mindfulness apps more than ever before.
Social Media and Influencer Marketing
As consumers spend more time on their devices, ecommerce businesses – small and large – are turning to social media to sell their products/services.
Recent stats show that worldwide social media users reached 4.2 billion at the beginning of 2021, which is expanding further.
Since buyers are online, business owners are ready to leap at the opportunity. Consumers out there are looking for online products to purchase, and business owners have a chance to grow their sales.
With growing trends of influencers on Instagram, influencer marketing is a huge tool for brands. Now more than ever, people are using interactive Instagram profiles and engaging TikTok accounts.
Consumers love to stalk their favorite influencers to keep track of the latest trends. What’s more, they can purchase what they like just with a tap of the screen.
While trends are dynamic and ever-evolving, the use of social media, in particular, is experiencing a consistent upward trend.
Go Eco-Friendly and Ethical
With the rise in social media use, people are becoming more aware of global issues. As such, consumers are making purchase decisions for political, ethical, and environmental reasons.
Several companies out there use unethical means to sell their products/services.
For instance, Ethical Consumer Organization includes a list of initiatives to persuade consumers to stop purchasing from certain unethical companies, including Air France (for shipping monkeys), Bluefin Tuna (for fishing endangered species), and several others.
So, it’s safe to conclude that the growing use of social media has contributed to better, more informed purchasing decisions overall.
Consumers are becoming more conscious about their online purchases and for the better. While some are ready to boycott brands for unethical reasons like animal torture, others wish to purchase from more eco-friendly brands.
Consumers are willing to go above and beyond in their shopping trends to reduce plastic and chemicals. In fact, many are seeking ways to “go green” for an ethical, economical, and healthier world. This is especially true for Millennial and Gen-Zers.
Wrapping Things Up
The unprecedented times wrought by the global crisis changed the world dramatically. There was a shift to a more digital world and shopping methods transformed.
Many ecommerce business owners observed massive growth within their stores. More and more people have flocked to platforms like Amazon, Shopify, Walmart, and other websites to make purchases.
With the increase in online shopping, a change in consumer trends was also seen. These behaviors and trends are expected to continue in 2022.
