Upsetting the Apple Cart: How Economic Uncertainty Is Impacting Buying Behaviors

In theory, sales economics is simple: Supply and demand regulate consumer spending.

In practice, making accurate predictions about consumer purchases is much more challenging. This is especially true in the wake of supply chain issues and looming recessions. What companies can deliver and what customers expect has changed significantly, which has resulted in an ongoing shift in buying behaviors.

This piece will break down the biggest impacts of unstable markets, explore what buyers want to see, and offer actionable tips for brands to build solid sales ground despite economic uncertainty.

Global Impacts of Unstable Markets and Economic Uncertainty

The International Monetary Fund (IMF) notes that global economic growth is slowing. In 2022, growth was at 3.5%, but in both 2023 and 2024, predictions put growth at 3.0%.

Country-by-country data reveals similar dips in spending and growth:

• In the U.S., a report from the National Retail Federation (NRF) put year-over-year spending growth at just 1.6% in the second quarter of 2023, down from 4.2% in Q1.
• In the U.K., consumer credit card spending growth dipped from 4.0% in July 2023 to 2.8% in August, according to Reuters.
• CNN notes that Germany’s economy fell 0.3% in the first three months of 2023, after a 0.5% reduction at the end of 2022.

The result? Customer behaviors are changing. While online shopping remains the purchasing route of choice for many buyers, there’s a shift underway in what they buy and how they buy it.

According to Entrepreneur, 74% of buyers increased their focus on saving money while shopping, with 91% saying they shopped during sales and promotions.

In addition, 70% of consumers say they’re spending more at discount retailers, and 79% are now purchasing generic or discount products rather than their brand-name counterparts.

What Buyers Want To See

Ideally, buyers want lower prices. Thanks to ongoing issues with materials sourcing, the complex nature of shipping logistics, and the increasing costs of material components, however, this isn’t always possible.

But it’s not all bad news. To help cultivate customer relationships, brands can give buyers what they want to see:

Sales

Regular sales can help capture buyer interest, which is especially beneficial for higher-end brands that may have experienced attrition due to lower-cost alternatives.

With a combination of online advertising and direct customer communication, brands can help bring buyers back (albeit temporarily).

Discounts

Discounts can also drive more sales. Brands might offer a discount if customers purchase a set number of items, for example, or if they buy a variety of items at once.

Other options include one-time use discount codes provided after the first purchase to bring customers back, or free shipping options if buyers purchase a certain quantity of goods in one transaction.

Loyalty Programs

These programs can drive more purchases if they offer direct value to consumers. The form doesn’t matter — whether companies use points, stars, or levels, they must ensure that customers receive a measurable benefit.

That benefit might be a percentage discount based on loyalty rank or early access to sales promotions.

If loyalty rewards don’t save customers money, they’re not worth the work.

How Brands Can Build Solid Ground

When it comes to convincing customers to part with hard-earned money, strategy is essential. Brands must take targeted action to capture customer interest and help facilitate the journey from interest to conversion.

Sales, discounts, and loyalty programs are now table stakes. Building solid sales ground requires a more focused approach.

Make Sure Content Is (Still) King

Customer engagement doesn’t happen by accident. Instead, it relies on brand content — via video, image, text, voice — that provides a consistent message backed by a compelling narrative.

Consider the rise of social media shopping, in which consumers purchase directly from social media platforms. In Q3 of 2022 alone, video-sharing service TikTok saw 30% growth in social commerce.

By creating content that appeals directly to target markets, brands can build better engagement.

Democratize Product Data

Buyers want the best deals, which means they’re more willing than ever to compare product features and pricing anywhere, anytime.

If they see great deals online, they may still visit retail stores to search for better sales. If they’re exploring in-store options, they’re pulling up ecommerce sites to see if they can get the same products for a better price.

As a result, data democratization is critical. By making product data easy to find, accurate, and supported by high-quality media elements, buyers can quickly find what they’re looking for and are more likely to consider your brand.

Give Customers Multiple Ways To Pay

Capture more customers by making payment easy. This means adding support for cryptocurrency or stablecoin to ecommerce sites — along with more familiar options such as credit cards and PayPal — so buyers can choose the option that works best for them.

Getting Buyers Back on Track

According to research firm McKinsey & Company, customers are twice as pessimistic about the economy now than they were during the pandemic, and the top concern among U.S. consumers surveyed was inflation and rising prices (65%), far outpacing personal safety (35%), COVID-19 (25%), and climate change (19%).

To help get buyers back on track, brands need to think outside the box. While sales, discounts, and loyalty programs help kickstart consumer interest, they’re not enough to navigate emerging market trends and help companies ride the wave of economic uncertainty and changing conditions.

Instead, brands are better served by finding ways to directly connect with customers, delivering immediate engagement, providing comprehensive product data, and making payment as easy as possible for prospective buyers.