(Bloomberg) -- Skittish consumers hunting for deep discounts -- or just sitting on their wallets -- look likely to hold down revenue for US retailers in the crucial back-to-school shopping season, according to a new survey.
While most shoppers still plan to shop key summer holiday sales like Amazon.com Inc.’s Prime Day, slated to run for 48 hours starting July 12, 24% are planning to pull back on spending this year thanks to a 40-year high in inflation and recessionary fears, Adobe Inc. said in a survey of 1,115 people nationwide released Wednesday.
A majority also worry discounts will be in short supply even though big-box retailers like Target Corp. have said they will offer steep discounts on excess goods. That concern has 76% of shoppers combing websites for the best deals and 60% making price comparisons at other retailers on their phones before deciding to spend, Adobe said.
“Given the types of items that they are looking to purchase during the summer sales -- the top one being apparel -- shoppers are starting to think, ‘How can I stretch my dollars farther?’” said Tory Brunker, senior director of product marketing at Adobe.
Despite the slowdown in discretionary purchases, many consumers are still looking for ways to maximize their spending power, especially when it comes to big-ticket items. Nearly half of the people surveyed said they are more likely to purchase from a retailer that offers buy-now-pay-later financing, either because it’s easier to make payments over time or because of low or no interest rates. In May, department-store chain Macy’s Inc. raised its full-year earnings guidance thanks to higher-than-expected credit-card revenue, a sign that consumers are feeling the pinch of inflation.
The pivot to buy-now-pay-later payment plans over traditional credit cards, or even PayPal and Apple Pay, among millennial and Gen Z shoppers underscores how stubbornly high inflation is forcing consumers to think strategically about how they spend, Brunker said. Although these services can be helpful for inflation-pinched shoppers, experts warn that buy-now-pay-later fintech can also lead to overspending and surprise bills later on.
©2022 Bloomberg L.P.
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