Recession 2024? How Shoppers Are Responding to Economic Shifts

2023 saw a drop in spending as experts predicted a recession and consumers tightened their belts to prepare for the worst.

While these predictions didn’t come to pass, uncertain economic conditions persist, leading many buyers to prioritize budget-friendly options over more expensive alternatives. Consideration and decision-making have also changed as customers seek out products and services that balance quality, cost, and value.

This post explores how shoppers are responding to economic shifts, what it means for brands, and what companies can do to capture consumer interest (recession 2024 or not).

Recession 2024 Realities

As noted by CNN, both the U.K. and Japan are now in “technical recessions,” which occur when gross domestic product (GDP) has two consecutive negative quarters.

Population shrinkage in Japan accounts for its recession, while in the U.K., it’s reduced consumer spending. Unlike its Eastern counterpart, both population and wages are growing in the U.K.

According to the Data & Marketing Association’s U.K. Consumer Trends Index 2023, 72% of consumers are “very pessimistic” about the current economic outlook, and half are pessimistic about their finances. As a result, 62% are now making fewer impulse purchases.

Meanwhile, the U.S. has seen steady GDP growth. But this doesn’t make the country recession-proof.

January 2024 saw lower-than-expected retail sales data, and the U.S. economy may be in a recession that hasn’t been formally recognized — a group known as the Business Cycle Dating Committee at the National Bureau of Economic Research makes this call, and it doesn’t always happen right away.

Recession or not, however, Americans are changing their spending habits. Retail Dive notes that 42% of U.S. consumers say they plan to spend more online in the next 12 months, with consumers citing low prices and fast shipping times as the most important differentiators.

Shifting Priorities: What Shoppers Want

With recession 2024 on their minds and not enough money in their wallets, consumers are adjusting their priorities and shopping behavior to better navigate the new economic reality.

According to the Salsify “2024 Consumer Research” report:

• 39% of consumers are now focused on finding budget-friendly buying options;
• 35% are prioritizing essential purchases; and
• 31% are spending more time on price comparisons before they make decisions.

For brands, this reality creates both challenges and opportunities.

On the challenge side, there’s a need to balance increasing material and logistics costs against the purchase price of items. While lower prices can help bring in customers, the adage about making it up on volume still applies — selling products for less than they cost to make and ship can help build a customer base, but it’s not a viable long-term strategy.

When it comes to opportunities, meanwhile, evolving economic conditions offer a chance to build brand loyalty by focusing on transparency and trust. If companies can show consumers why goods cost what they do — and why this cost is worth it — they can keep buyers coming back.

Changing Behaviors: How Buyers Are Adapting

Customers are also changing their pre-purchase approach. Salsify data notes that nearly one-third of shoppers now spend 30–60 minutes researching potential purchases.

What’s more, 25% of shoppers now say that they will click through to page five of Google search results. This is a far cry from the first-page-only approach previously followed by consumers.

While more research by consumers requires more effort from brands to stand out from the crowd, it also means more chances to impress.

Consider a brand with solid search engine optimization (SEO) that has trouble cracking the first two pages of Google search results. With customers now willing to do more work for better value, this brand can capture new business by putting time and effort into creating product display pages (PDPs) and shopping experiences that stand out from the crowd.

Salsify data backs up this idea — 73% of shoppers say that product quality is a main component of brand loyalty, while 52% highlight value for money, and 49% point to positive customer service.

Brand Tips for Recession Resilience

So how do brands navigate a recession-weary world? Here are four tips to help.

1. Prioritize Product Quality

As noted, about 73% of shoppers prioritize product quality — this makes it a priority for brands as well. The caveat? It’s not enough to make a great product; brands must also ensure products are effectively showcased using PDPs that include high-quality images, recent user reviews, and relevant product data.

2. Leverage Loyalty Programs

Budget-conscious buyers see the benefits of loyalty programs, and these programs offer a way for brands to build a reliable customer base. For these programs to succeed, however, two components are critical.

The first is value. No matter what your program offers — points, stars, levels, or some other metric — it must be tied to a valuable outcome. This might include a percentage discount, additional order items, or early access to new products.

Second is the recognition that loyal customers have higher expectations. While they’re willing to come back over and over again for the products they want, they’re also more willing to complain if something goes wrong.

3. Try Out Trial Size

With value for money taking the second spot in consumer priorities, brands need a way to showcase product value without expecting buyers to spend full price. Trial sizes are one way to achieve this goal. You can give them away for free as part of a larger order or sell them individually at a lower price to let customers see more of your value first-hand.

4. Talk the Talk — Then Walk the Walk

Missions matter when it comes to customer retention. But it’s not enough for brands to talk about environmental, social, and corporate governance (ESG) initiatives — they also need to walk the walk.

Consider that 80% of Generation Z and millennials base their purchasing habits in part on a brand’s ability to carry out its stated mission, notes Apparel Resources, a news hub for the apparel and textile industry. Put simply, if you say you’re going to do something, do it.

Class is Now in (Re)cession

Customers are evaluating brands on more than just price — now, they’re testing brand commitments to taking sustainable action, delivering quality products, and creating reciprocal relationships. If companies can earn passing grades, they’re better positioned to capture consumer loyalty and keep buyers coming back.