The US economy is heading for recession! How are consumer shopping behaviors changing?

The probability of a U.S. recession in 2023 has climbed to 70% from 65% in November, more than double the rate six months ago, according to Bloomberg’s latest monthly survey of economists. The poll was conducted between December 12 and 16 and surveyed 38 economists.

In recent years, American consumer behavior has been evolving. As we head into 2022, global conflicts have strained already unstable supply chains, and under the influence of inflation and recession, Americans' consumption patterns and mentality are changing.

Inflation affects purchasing motivation

The recession has created uncertainty, with data showing that the most recent Consumer Price Index report showed a 7.7% year-over-year increase.

Consumers have become more cautious, but they continue to spend, just in different ways. More than two-thirds of consumers would consider private label products. In fact, according to the above report, most consumers are more likely to buy Amazon's private label brands (76%) than other brands due to their lower price.

Deals and discounts are also on the rise as consumers seek low-cost alternatives to brands, with budget constraints leading them to look for models or styles with fewer features and lower average prices.

More discounts and forms

Over the past few weeks, discounts have increased in variety and intensity, such as bundle offers, early access deals, price match guarantees, limited-time exclusives or flexible delivery options, and more discounts are expected to come.

Salesforce reported that the average discount for Amazon's fall Prime Day this year was over 21%, the largest discount outside of Cyber ​​Week since the start of the pandemic.

More people subscribing to loyalty programs

Customer loyalty programs are increasingly important in the current economic environment as consumers seek cheaper prices. For brands and retailers, membership subscription services offer tremendous value as an effective way to maintain and increase market share.

In fact, Amazon Prime membership is at an all-time high, up 20% since 2019. Many consumers have more than one membership in addition to Prime to enjoy better deals and discounts. In addition to Prime, the most popular memberships include Walmart+ (35%), Costco (30%), and TargetCircle (25%).

Consumers place more emphasis on shopping convenience

Today’s consumers place greater emphasis on interactive shopping experiences that offer convenience and flexibility to make purchases quickly and securely.

44% of consumers expect to use voice search to add to cart or make an immediate purchase, and more than 50% have made a purchase through social media in the past six months, many of which were driven by influencers and augmented reality.

Additionally, consumers are more decisive when making purchasing decisions, with 70% purchasing the first product that appears in Amazon search results.

As another holiday season comes to an end, U.S. online retail sales grew 4% year-over-year, an increase but slower pace than the 15.1% growth in 2021. Consumers are expected to continue spending until the final hours before Christmas, but they are expected to be more cautious.

It is imperative that brands and merchants align product, pricing and promotion strategies with current sensitivities, feature products at price points that resonate with today’s consumer mindset, leverage repricing capabilities to dynamically adjust prices based on consumer demand, protect margins and outperform the competition.

Editor✎ Ashley/

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