Online shopping craze not going away anytime soon: Expert
Mainstay Capital CEO and CIO David Kudla provides insight into markets on the first day of trading in September.
As Americans are strapped for cash and limited by coronavirus restrictions imposed on brick-and-mortar retailers, a new survey by online payment firm Paypal and online coupon browser extension Honey has found a surge in consumers who are seeking out online deals.
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The survey found that four out of five Americans (79%) believe finding a great deal is more important than ever, as 58% of respondents reported a decrease in household income due to the pandemic. The survey noted 37% of respondents spend between one and two hours a week looking for online coupons and deals while 20% report spending between three and four hours per week.
Fashion and retail psychologist Dawnee Karen told FOX Business that the online shopping trends may be fueled by consumers feeling a lack of control as government policies continue to limit where people can shop and retailers enforce social distancing and mask policies.
"There's a lack of control in our lives right now," Karen said. "Our roles are being turned upside down. So I believe that people are having this insatiable desire to go online shopping because they are trying to get a sense of equilibrium and control."
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While Karen acknowledged that there was a time where cutting coupons was viewed unfavorably, she explained that American shoppers are now depending on online deals to avoid feeling buyer's remorse or a fear of missing out.
"If we're shopping because we have this lack of control, at least you're going to shop with a deal in mind so that you don't have buyer's remorse and you're making smarter shopping decisions," Karen said.
According to the survey, one in five shoppers who made a full-priced purchase during the pandemic experienced guilt, while 38% of respondents experienced anxiety and 22% experienced frustration. About 61% of respondents reported having buyer’s remorse within several hours of making a full-priced purchase while 62% reported a fear of missing out after choosing not to buy a discounted item they wanted.
Meanwhile, 67% of respondents reported feeling less guilty after making a purchase where they found a good deal.
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As more brick-and-mortar retailers reopen, Karen believes that the key component to attracting customers to shop in-store and to rebuild trust and confidence is by offering real savings.
"The key component here is to let [customers] know how we are helping you save, how you're getting the most bang for your buck," Karen said. "I think that's what's going to get them in and get them to return."
She added that if retailers successfully rebuild trust and confidence in American consumers to shop in person, it may even give them enough of a boost to head back to work. However, she argues that the online shopping trend will be here to stay even as more people begin feeling confident enough to venture outside their homes.
"We've kind of got accustomed to shopping online and, you know, getting things back at your doorstep and making it feel like Christmas or your birthday," Karen said. "So I think we will still continue to shop online. I think this is our new normal."
According to an analysis of Department of Commerce data by Digital Commerce 360, consumers spent $347.26 billion online with U.S. retailers in the first six months of the year, up 30.1% from $266.84 billion for the same period in 2019.
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