The Future of Retail: How Attitudes are Changing with 2024's Rising Costs

What’s making Britain’s shoppers tick? In what seems like a never ending stream of economic uncertainty, from the cost of living crisis, potential tax increases, and recessions, the British shopper isn’t as spendthrift as they used to be.

Lightspeed’s latest consumer research surveyed over 1,000 consumers across the UK to delve deeper into what is really motivating Britain’s shoppers. The research covered four main areas: how shoppers are responding to rising costs, current attitudes towards sustainable shopping, the different types of shoppers that have emerged from the cost of living crisis, and the general reception in the country to the rise of artificial intelligence.

The survey shows that, generally speaking, consumers are becoming more financially savvy than ever before, shopping exclusively for deals, prioritising second-hand clothing, and swapping retailers to get the most bang for their buck. In this blog, we’ll cover all of this and more, and even understand how retailers can leverage the current shopper’s sentiment to their advantage.

• Rallying against rising costs
• Adopting pre-loved items
• Emerging typologies of shoppers
• The AI revolution: acceptance or outrage?

Rallying against rising costs

There’s not been any shortage of news coverage concerning the ‘cost-of-living’ crisis which began in late 2021. Rising inflation, lack of wage increases, and even tax changes has meant that the average UK citizen’s disposable income has shrunk further and further. 

Lightspeed’s recent research captures the nation’s feelings on the costs of products rising with 77% of respondents saying they believe that rising prices for retailers, such as energy bills and rent, are the primary reasons behind increased prices. More than half (51%) of those surveyed do not believe these price hikes are fair.

In order to workaround these financial roadblocks, shoppers are adopting cost-saving measures such as taking “two for one” deals (51%), changing their preferred retailers to find cheaper prices (39%), shopping less frequently than last year (38%), only shopping during sales periods (24%), and asking others what they want for Christmas and birthdays to avoid wasting money (24%). 

However, this isn’t indicative of all shoppers. 24% of Gen-Z shoppers have been found to be spending more money than they were 12 months ago, with 28% saying they make more impulsive purchases largely thanks to social media. Nearly a third (32%) of Gen Z shoppers are also now shopping exclusively during sale periods to get the best deals. 

Adopting pre-loved items

Sustainability has been a focus area within the retail sector for over a decade now. Retailers are no longer looking to do the bare minimum to keep shoppers happy and content, but are looking at leading with sustainability in mind in all their practices, rather than treating it as an afterthought. 

The expansion of the resale market from leading high-street retailers, the drive to integrate sustainable practices throughout the supply chain, the development of technology (particularly AI) in isolating opportunities to be more operationally efficient, and the compliance with ESG-related regulations have all helped to spur on and continue the path to sustainability across the entire sector.

Deloitte’s 2023 CxO Sustainability Report found that 73% of Consumer Industry CXOs have increased investments in sustainability over the last year, with 65% of respondents using more sustainable materials (e.g., recycled materials, lower emitting products, less plastic material, ‘circular’ products), and 50% of respondents developing new climate-friendly products or services.

Many retailers are even venturing into, or enlarging their footprint in, the pre-owned goods market by establishing marketplace and offering buy-back programmes.

Lightspeed’s consumer survey found that while 62% of people say they haven’t shopped in store for pre-loved or reconditioned items, nearly half of respondents (45%) stated that they plan to, already check, or consider the ethical and sustainable origins of a product before buying something new. 

However, perhaps surprisingly, their primary reasons for doing so is less ethically driven and has more to do with the impact on their pocket, with cost-effectiveness (61%) being the top motivator followed by environmental concerns (35%), with old items being seen as better quality than new items (29%), recurring fashion trends that have come round again (20%), and opposing fast fashion (19%).

Emerging typologies of shoppers

Whilst rising costs has resulted in the rise of price-conscious shoppers, they’re not the only type of shopper found from Lightspeed’s recent consumer survey. They survey found that, whilst a huge 76% identified as a ‘deals shopper’, meaning they actively look for deals, discounts and offers to gain bang for the buck, a large percentage of people weren’t as motivated by finding the perfect deal.

46% of shoppers identified that they are ‘last minute shoppers’ who like a speedy in store experience with attentive customer service, good stock availability, and multiple store locations so they can get what they want, when they want. With a further 17% of all shoppers surveyed seeing themselves as ‘social first shoppers’ meaning they buy things that are trending and get inspiration from social media. Penny pinching may have become an unfortunate necessity for many shoppers, but there is still a large contingent of shoppers who prioritise convenience over everything else. 

35% of shoppers indicated they were ‘personal shoppers’ who liked to schedule their shopping trips in advance, expect good customer service, and are open to stores using AI to enhance their shopping experience so it feels more personal to them. So, whilst not so rooted in convenience or concerned about cost, these shoppers considered personalisation and a bespoke shopping experience one of the most important factors that motivated them.

Finally, whilst there was a sentiment amongst many shoppers who bought pre-loved or reconditioned items that their main incentive was to save money, 32% of shoppers surveyed still classified themselves as ‘fair share shoppers’ who actively sought out second-hand pre-loved shopping experiences as they valued the ethical and sustainable aspects of the brands and items they shop for. 

The AI revolution: acceptance or outrage?

Much has been said about the proliferation of artificial intelligence in what seems to be every aspect of our daily lives, and it extends far beyond Chat-GPT. Healthcare has seen developments with AI aids in medical diagnostics, personalised medicine, and predictive analytics. The financial sector has used AI for fraud detection and risk assessment. And, now the retail industry has begun leveraging AI as well. Retailers can now utilise artificial intelligence for personalised marketing, inventory management, and even customer insight, all of which can help streamline and optimise operations and improve customer experience.

However, in spite of all the numerous advantages of AI, the nation is currently split on how comfortable they feel, with 32% stating they are somewhat comfortable to very comfortable with AI being part of the shopping experience and 35% saying they feel somewhat uncomfortable to very uncomfortable with it. 

When asked about people’s direct experience of AI whilst shopping it’s the need for speed that wins shoppers over, with 41% of respondents saying that self check-out in more stores would enhance their experience the most. This is followed by people being more open to AI in store that delivered personalised discounts to them (39%), personalised suggestions in-store (28%), recipe suggestions based on what’s in their grocery shopping (27%), virtual fitting rooms (26%), make-up shade matching (23%), and changing digital window displays (21%) according to Lightspeed’s latest research.

Artificial intelligence, and its integration into our lives, is an inevitability. Some are perfectly content around these changes, and others, it would seem, are not. However, the general consensus would seem to be that so long as AI within retail is shown to help shoppers save money, find better tailored options to them, and make quicker purchasing decisions, the average consumer tends to be on board.

Key takeaways

Lightspeed’s consumer survey underscores the need for retailers to adapt and evolve to keep up with growing consumer demand. Consumers now expect discount options and ranges from the retailers they regularly shop with, sustainable (up-cycled/recycled) products, and AI integration where it benefits them (rather than just the retailer). 

Time will tell whether Britain’s economic uncertainty ends anytime soon. But, in the meantime, retailers need to be fluid and pragmatic in how they deal with this new breed of savvy shoppers. If you’d like to learn more about how Lightspeed can streamline your operations, easily offer discounts, and offer a seamless retail experience, you can find out more here.