Economic Pulse: Consumer Insights for Summer Spending

It’s no secret that many Americans are unsure about our economic future. A recent poll showed that more than half of Americans think the U.S. is in a recession. Similarly, our latest consumer survey found that confidence in the national economy is waning. Looking back at the past six months, 50% of consumers said they believe the economy has worsened— just 30% believe it has improved, and even fewer believe it’s stayed the same (20%). On top of that, only 35% of respondents in our survey reported feeling confident in the current state of the economy—the remaining 65% weren’t so sure.  

While there is data suggesting that the economy is doing well, rising prices and inflation are placing increased stress on household budgets and curbing online spending. With summer shopping and travel fast approaching, it’s important to understand consumer behavior and economic sentiments so brands and retailers can refine their inventory forecasts and prepare their summer sale strategies.   

Inflation is a key concern for consumers. Of the participants in our survey, 61% believe that inflation has worsened over the last 6 months. Similarly, over 60% of respondents believe that the price of goods has increased, for both essential and non-essential items. 

Aligned with that trend, most consumers surveyed say they’ve maintained or decreased their spending over the last 6 months (76%).  While some have maintained the same level of spending with little change in their habits, many feel they’re getting much less “bang for their buck.” Others have had to make tough choices about what to buy, avoiding nonessential items and extra costs entirely. 

Looking at spending data, it follows that price sensitivity has also increased significantly over the past year. 84% of consumers in our survey reported some level of price sensitivity—of that, 38% reported being much more sensitive to price changes and say they have significantly changed their shopping habits as a result. 

This puts retailers in a tough spot. For most brands, rising prices typically means less consumer spending—and now, even large retailers like Walmart, Amazon, and Target are feeling these market pressures. In fact, Target just announced it will be cutting prices on up to 5,000 items to lure back inflation-weary shoppers. As consumers work to curb and control their spending, is a summer slow down in sales looming for online retailers? We asked consumers to find out. 

Despite trends of decreased or stagnant spending levels, our research shows that many consumers are not putting their summer plans on hold—and they’re still willing to spend in specific categories as a result. Our survey found that: 

Those surveyed also expressed some urgency behind these online purchases, with many saying they plan to buy within the next 6 months. Clothing and apparel was a particularly hot vertical, but retailers in each of these categories should plan for a surge as folks gear up for summer travel, local adventures, and warm weather wardrobe updates. 

Travel accessories were also a noteworthy category for planned purchases. About half of the consumers we surveyed (48%) are considering or planning to make a purchase in this category over the next 6 months, an insight that’s well aligned with broader market trends. Despite economic pressures, Deloitte’s 2024 Summer Travel Survey shows that Americans’ intent to travel has remained high. However, there has also been an increased emphasis on travel deals in 2024, indicating that the pressures of inflation and rising prices are widely felt. As Americans continue to find wiggle room in their budgets to enjoy summer adventures—and find deals that make their trips more affordable— retailers should expect to see a surge in interest for travel accessories, clothing, and other travel-related products. 

Summer sales will be a key tool for retailers looking to maintain or increase their sales volume this summer. According to our survey, 58% of consumers are more likely to purchase an item they weren’t originally planning to buy if they see a sale or promotion. While sales have historically been an effective way to bolster sales during economic uncertainty, they’ll be even more critical in the next six months. Based on our Radial Research data, a strategically timed offer could be the difference between a lost sale and a shipped order. 

Summer sales will also be key to convincing customers to switch brands. 69% of customers in our survey said that, while they prefer to stick to brands they know, they would be willing to switch if there’s a good deal on another product; another 13% of respondents said they’re solely focused on getting the best deal. Only 19% of consumers said they would be loyal to known or preferred brands, even if they’re more expensive.  

With that data in mind, offering timely summer sales and deals will be critical to gaining new customers this summer—and keeping the ones you have coming back. 

As the industry’s largest 3PL provider, Radial supports thousands of brands and retailers as they prepare for seasonal surges and navigate economic uncertainty. From inventory management and fulfillment, to transportation management and final mile optimization, Radial plays a key role in enabling brands and retailers to profitably exceed customer expectations.

Follow Radial on LinkedIn, Facebook and Twitter.