Many would think that the combination of a looming recession and global warming might deter people from their ‘regular’ shopping habits, and with the rising concerns over sustainable spending, reduce the amount of returns made from those shops. However, according to the 2022 Voyado Index, consumer behaviour is quite the opposite.
All industries have seen an increase in purchase rate, which means that individuals are shopping more frequently now than before. DIY and home improvement saw an increase of 16%, which was closely followed by an increase in sport and fashion of 11%.
Interestingly, despite people purchasing more frequently, they are actually spending less overall. So, while overall purchasing has increased people are buying fewer items when they do shop, and the average receipt value is lower. Overall, there are 2% fewer items on each purchase receipt.
Buy Now, Pay Later may have played a role in this because it increases the likelihood that consumers will make impulsive purchases, and then later discover they cannot afford the increase in their monthly expenses - and then return them. This issue could be remedied by helping consumers realise the "actual" cost of an item, as well as informing them about the environmental impact of mass returns.
Returns have also seen a higher rate in comparison to last year. This year, the average return rate across industries increased by a concerning 13%. Women have contributed most to the overall increase in returns in both the sport and fashion industry and the health and beauty industry. Retailers should think about adding a return fee as a form of deterrent. Additionally, encouraging in-store returns, rather than online returns, could result in more exchanges as an alternative to returns.
Without a doubt, the cost-of living crisis and inflation have altered consumer shopping habits. The results from the Voyado Index could be a result of people on the constant hunt for bargains to help save their pennies and simply buying a larger number of ‘cheaper’ items than before. The increase in returns can be a massive headache for retailers, as well as a burden on the environment, and therefore is a challenge retailers need to address to not only increase their profits, but to also boost sustainability.
The index is based on aggregated and anonymous data from more than 164 million purchase occasions divided into four industries: health and beauty, sport and fashion, DIY and home improvement, and lastly, electronics. All the data is based on the Voyado customer, all retail brands across Europe, with focus on the Nordics, UK and BLX.
The Voyado BI-team has crunched the data and collected it from September 2021, through to September 2022, and compared to the same period the year before.
Written by Felix Kruth, chief product officer at customer loyalty firm Voyado
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