While retailers adapt to the ‘new normal’, it’s important to remember that consumers are having to adapt as well. Financial stability is front of mind for many – something retailers must take heed of, writes Owain Jones, head of strategy and insight at Barclays Partner Finance.
Consumer spending habits are changing. In a customer survey conducted in July 2020, 78% of respondents told us their spending plans had been impacted by the UK’s lockdown measures, while 43% felt their spending habits would need to change once restrictions are lifted*.
The pinch of the pandemic is clear, with 31% of respondents reconsidering their preferred payment method as a result of monthly budgeting.
What’s more, the ability to spread the cost of purchases has become a growing priority for 16- to 39-year-olds.
As consumers shift their focus to self-care, home and hobbies, retailers are right to revise their product and service offerings to meet demand. But it’s clear that the financial side of the purchase is a concern for many consumers at the moment.
Provide a range of options to attract price-sensitive shoppers
Breadth of payment choice and clarity over financial obligations are vital in these uncertain times as consumers look for more reassurance and more time to consider if they’re making the right decision.
Right now, consumers are stepping back before looking forward – carefully planning future purchases and re-evaluating the need to splash out. Although this isn’t new behaviour, it’s now much more prevalent.
Retailers have to react and make sure the payment options they’re offering their customers can flex to their changing needs. Finance at point-of-sale has become part of the retail experience that many consumers now expect.
“Right now, consumers are stepping back before looking forward – planning future purchases and re-evaluating the need to splash out”
A closer look at our research shows that 67% of people believe the offer of interest-free credit at point-of-sale would make purchases they’re currently considering more affordable.
As well as allowing consumers more flexibility with their budget, offering point-of-sale finance as a payment option demonstrates that retailers have an understanding of changing consumer needs. And this could be something to factor into future advertising.
By being upfront and transparent about finance options at multiple stages of the purchasing journey, retailers will be able to show consumers how it could benefit them.
It’s clear that in today’s challenging climate, financial stability has become king for consumers. It’s now up to retailers to make this important insight a key part of the customer experience.
*‘Has your customers’ spending really changed?’ Based on the responses of 1,028 UK consumers in July 2020.
To learn more on consumer shopping trends in the run-up to Christmas, watch the first episode of Money Talks, our video series aimed at getting under the skin of shoppers in the crucial festive period.
Owain Jones is head of strategy and insight at Barclays Partner Finance