We are a nation that's torn between splurging on items now before prices go up further or hanging on to the money and waiting until prices come back down.
What categories will win and what categories will likely cool off?
With the Consumer Price Index and inflation high, combined with fuel prices taking hundreds of dollars out of people's pockets, consumers are having to decide "Should I buy or should I wait?"
It might surprise us that one of the biggest things that people want to spend more dollars on "now before the prices go up" is apparel and shoes. Consumers are looking to splurge on work clothes and even clothes for upcoming vacations. The joy of buying clothes and shoes can give consumers a much-needed boost of confidence and feel good about themselves, and see something different in the mirror.
On the other hand, car repairs are a practical matter that consumers want to take care of "now versus putting off" as buying a new or used car has become more expensive than ever.
Big investments and big-ticket purchases are the items that people are starting to pause. Home prices have been going up, and now interest rates are going up to help curb inflation. As a result, more consumers are putting that dream home on the back burner. Consumers also report that remodels are cooling off from big remodels to home decor items. Lastly, consumers are tapping the brakes on buying a car, whether it be a new or used car.
Items consumers want to buy now before prices go up more:
% of consumers will do now before prices go up more
29% Buying apparel and shoes (vs. 18% wait)
20% Car repairs (vs. 14% wait)
Items to put off until prices come down:
% of consumers Will Likely Put Off
21% Home remodels (vs 12% do now)
19% Buying a home (vs. 5% do now)
28% Buying a car (vs 12% do now)
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Why it matters
Businesses are in this "race to nowhere" in which everyday activities that we enjoy and those big-ticket purchases that we've been saving for will not be affordable.
In many categories, once to take the price up, you can't take it back down.
Many businesses will be left with no choice but to deal or discount their way back.
Not a good recipe for success.
Instead of defaulting to pricing action, ask yourself, how can you add value to your offering? Your customer will reward you with more purchases and more visits.
Survey data was collected the week ending March 21, 2022, by Lisa W. Miller & Associates and Prodege, LLC from a representative sample of 1005 adults 18 years and older.