What: The state of consumer behaviors has shown to be incredibly susceptible to change throughout the pandemic, so what does this growing inflation mean for how people will shop in the months ahead?

Why is it important: Half of U.S. consumers say that rising costs of goods and services are making it hard to afford things. When asked about what the most important purchase criteria are right now, 58% of respondents cited price while 64% said that price will be the most important purchase criteria in the next three years.

In another study to understand how inflation is affecting consumer spending habits, 66% of U.S. consumers are concerned that rising costs will prevent them from paying for the things and experiences they had planned for the year. For Millennials and Generation Z, the number was 73%.

When it comes to price sensitivity, consumer research found that gas, fresh food, and packaged food are less susceptible to experiencing a change in how consumers purchase compared to nice-to-have categories. In fact, while consumers are bracing themselves for higher prices, they will continue to pay them. 65% of consumers say they haven’t changed the way they are consuming gasoline and 59% say fresh food is still important. However, 38% of consumers say they’re purchasing less apparel and 29% say they’re purchasing fewer beauty products.

An area that consumers are struggling with seems to be in planning to pay for experiences where they are taking note of rising prices in conflict with the desire to travel and plan activities after spending most of the last two years in pandemic lockdown.

With an increase in priority for sustainability in mind, despite inflation costs, 40% of consumers said they will only buy from brands that align with values, even if that means switching from brands they know and trust. This finding was true for 53% of Millennials, 46% of Gen Z and 26% of Baby Boomers.

With saving money in mind, consumers said they will try to stay home. For 38% this means prioritizing purchases for the home as a top priority. More than half of consumers said they will deprioritize going out to restaurants, while 47% said they will deprioritize entertainment and 34% said they will deprioritize beauty as a spending category.

At the same time, 23% of consumers said they are likely to use a buy now, pay later option like Affirm over the next month as a result of rising prices. At 41%, Millennials and Gen Z were almost twice as likely as consumers overall to choose to use BNPL due to inflation.

Notably, these studies revealed more than half of consumers are interested in using pay-over-time solutions this year. In doing so, consumers get the items that they need, in a way that fits their budget.

Inflation’s Impact on Consumer Behavior