Shopping: Survey: 60% of Consumers will Abandon Purchases if Prices Rise Beyond 10% Due to Tariffs

Why it is the topic trending:

• Potential Impact of Tariffs on Consumer Spending: The article addresses the significant concern of how potential tariffs could affect the prices of imported goods and, consequently, consumer spending habits.

• Consumer Price Sensitivity to Tariffs: The survey data reveals a clear threshold at which consumers are unwilling to absorb price increases due to tariffs, highlighting the potential economic impact of such policies.

• Shifting Spending Habits in Anticipation of Tariffs: The survey indicates that consumers are already altering their spending behavior in anticipation of potential tariff-related price hikes, demonstrating a proactive response to economic uncertainty.

• Overview:

  • Tariff Price Limit: Six in 10 US consumers will not accept price increases of more than 10% due to tariffs, according to an ESW survey.

  • Consumer Preferences for Absorbing Costs: Consumers prefer free shipping, loyalty rewards, and transparent communication over price hikes to offset tariff costs.

  • Spending Reduction Expected: 70% of consumers plan to reduce overall spending if tariffs take effect.

  • Gen Z Spending Now to Save Later: Younger consumers are pulling forward purchases of high-priced items in anticipation of tariffs.

  • Pet Supplies Remain Priority: A significant percentage of consumers will continue to prioritize spending on pet supplies despite potential price increases.

Detailed findings:

• 60% Won't Absorb Over 10% Increase: Six in 10 U.S. consumers will not absorb more than a 10% increase in pricing due to tariffs.

• Free Shipping and Loyalty Rewards Preferred: Besides discounts, consumers want free shipping, loyalty rewards, and transparent communication about price increases to offset higher tariff-induced costs.

• 70% Will Reduce Spending: 70% of all consumers say they will reduce overall spending once tariffs go into effect. Millennials (78%) top this list, while Boomers (54%) are most likely to stop buying certain imported goods.

• 58% of Gen Z Pulling Forward Purchases: 58% of Gen Z shoppers have accelerated purchases of expensive items like iPhones and computers before potential tariff increases. Overall, 45% of consumers have pulled forward spending on electronics, and 37% are stocking up on groceries.

• 68% Cutting Back on Electronics: 68% of consumers plan to cut back on electronics due to tariff increases, followed by apparel/accessories (61%) and home goods (51%).

• 33% Will Pay for Pet Supplies Regardless: 33% of consumers will continue to pay for pet supplies despite tariff increases, second only to groceries.

• Millennials Favor BNPL: Millennial consumers are 36% more likely than other generations to prefer "buy now, pay later" options even if it means higher prices due to tariffs.

• Online Shopping Perceived as Less Expensive: Nearly 40% of those spending more online feel it's less expensive than in-store shopping, and almost 49% plan to spend more online due to increased options.

• Luxury Brands Benefit from Global Shoppers: 25% of luxury goods purchasers bought from outside their home country, with 21.2% buying from these brands both domestically and internationally.

• International Purchases Due to Lower Cost: Nearly 46% of online shoppers buying internationally do so because the total cost (including taxes and shipping) is lower.

• Most Won't Pay More for Sustainable Products: About 53% of consumers won't pay more for eco-friendly products, although half consider environmental impact and 54% consider ethical production.

• 32% Intend to Spend Less Online in 2025: Of those planning to cut back online spending, 58% cite saving money as the main reason, followed by economic climate concerns (36%) and high cost of essentials (32%).

Key success factors of product (trend):

• Price Competitiveness: Maintaining prices within consumers' acceptable threshold (under a 10% increase due to tariffs).

• Value Proposition Beyond Price: Offering additional value like free shipping, loyalty rewards, or discounts to offset potential price hikes.

• Transparency and Communication: Clearly communicating any price changes and the reasons behind them to retain consumer trust.

• Buy Now, Pay Later Options (for Millennials): Offering BNPL plans can make higher-priced items more accessible even with potential tariff increases.

• Availability Online: Leveraging the perception that online shopping is often less expensive and offers more options.

Key Takeaway: A survey by ESW reveals that most U.S. consumers are highly sensitive to price increases caused by tariffs, with 60% unwilling to absorb more than a 10% rise. This price sensitivity is prompting consumers to reduce overall spending and even pull forward purchases in anticipation of tariffs. Retailers and brands need to focus on offering value, price transparency, and flexible payment options to retain customer loyalty in this environment.

Main trend: The main trend is increased consumer price sensitivity and potential spending cutbacks in response to anticipated tariff-induced price increases, particularly in the US market.

Description of the trend (please name it): The trend is "The Tariff-Wary Consumer." This describes the heightened awareness and cautious spending behavior of consumers who are anticipating potential price increases on goods due to tariffs and are prepared to reduce their overall spending or seek alternative purchasing options if prices rise beyond a certain threshold.

What is consumer motivation:

• Protecting Personal Finances: Consumers are motivated to maintain their budgets and avoid spending more due to external factors like tariffs.

• Seeking Value for Money: Consumers want to ensure they are getting the best possible value for their money and may perceive tariff-driven price increases as unfair.

• Avoiding Higher Costs on Non-Essential Items: Consumers are more likely to cut back on discretionary spending (electronics, apparel, home goods) when faced with price hikes.

• Stockpiling to Avoid Future Costs: Some consumers are proactively buying goods now to avoid potentially higher prices later.

• Exploring Alternative Purchasing Channels: Consumers may look to online or international retailers to find lower prices if domestic prices increase due to tariffs.

What is driving trend:

• Anticipation of Tariffs: Potential or announced tariffs create uncertainty and lead consumers to expect price increases.

• Rising Cost of Living: Existing inflationary pressures may make consumers even more sensitive to additional price hikes.

• Economic Uncertainty: Concerns about the overall economic climate can make consumers more cautious with their spending.

• Increased Awareness of Global Trade Issues: News and media coverage of tariffs can make consumers more aware of their potential impact on prices.

What is motivation beyond the trend:

• Maintaining Current Lifestyle: Consumers may try to maintain their current spending habits as much as possible by cutting back in certain areas to afford others.

• Seeking Control Over Spending: Resisting price increases can be a way for consumers to feel they have some control over their finances in an uncertain economic environment.

Description of consumers article is referring to:

The article primarily refers to U.S. consumers who were surveyed about their potential reactions to tariff-induced price increases.

Summary of Consumer Description: U.S. consumers across various demographics, particularly Gen Z and Millennials, who are aware of potential tariffs and are highly price-sensitive, prepared to reduce spending and seek alternatives if prices rise significantly (over 10%).

• Who are them: Adult consumers in the United States, with the survey including a representative sample.

• What kind of products they like: The survey covers a range of goods, including electronics, apparel, home goods, groceries, and pet supplies, suggesting a broad base of consumers across different product interests.

• What is their age?: The survey broke down responses by generation (Gen Z, Millennials, Boomers), indicating that age is a factor in how consumers might react.

• What is their gender?: The survey does not specify gender as a differentiating factor in this trend.

• What is their income?: While not explicitly stated, price sensitivity suggests that the findings are relevant to a wide range of income levels, particularly those who are budget-conscious.

• What is their lifestyle: Their lifestyle involves purchasing various types of goods, and they are attentive to potential changes in prices and the economic environment.

• What are their category article is referring shopping preferences: They shop across various categories, with the survey highlighting potential cutbacks in discretionary items and continued prioritization of necessities like groceries and pet supplies. They are also considering pulling forward purchases and exploring online and international options.

• Are they low, occasional or frequent category shoppers: The survey doesn't focus on shopping frequency but rather their intended behavioral changes in response to tariffs.

• What are their general shopping preferences-how they shop products, shopping motivations): They are motivated by value, affordability, and a desire to maintain their purchasing power. They are willing to adjust their shopping habits to mitigate the impact of potential price increases.

Conclusions: The ESW survey concludes that U.S. consumers are highly sensitive to tariff-induced price increases and are likely to reduce spending and seek alternatives if prices rise significantly. This highlights the potential economic consequences of tariffs and the importance for retailers and brands to consider strategies for mitigating their impact on consumers.

Implications for brands:

• Strategize to Absorb or Offset Tariff Costs: Brands need to explore ways to minimize price increases for consumers, such as absorbing costs or finding alternative sourcing.

• Enhance Value Proposition: Offering more perceived value through free shipping, rewards, or discounts can help retain customers despite potential price hikes.

• Communicate Transparently About Pricing: Open communication with consumers about any price changes due to tariffs can help maintain trust.

• Consider "Buy Now, Pay Later" Options: Offering BNPL can make higher-priced items more accessible to consumers.

Implication for society:

• Potential Impact on Consumer Spending and Economic Growth: Widespread spending cutbacks due to tariffs could have negative consequences for overall economic activity.

• Shifting Consumption Patterns: Tariffs could lead to changes in what consumers buy and where they buy it.

Implications for consumers:

• Potential for Higher Prices on Imported Goods: Consumers may face increased costs for a variety of products if tariffs are implemented.

• Need to Adjust Spending Habits: Many consumers may need to reduce their overall spending or make different purchasing decisions.

• Possible Benefits from Price Transparency and Value Offers: Retailers and brands may offer more transparent pricing and better value to retain customers.

Implication for Future:

• Continued Monitoring of Tariff Policies and Consumer Response: Businesses will need to closely track trade policies and how consumers react to any resulting price changes.

• Potential for Supply Chain Adjustments: Companies may explore shifting their supply chains to avoid tariffs.

Consumer Trend (name, detailed description): The Tariff-Contingent Spending Plan: This trend describes how consumers are proactively planning and adjusting their spending habits in anticipation of potential price increases resulting from tariffs, indicating a direct link between trade policy and consumer behavior.

Consumer Sub Trend (name, detailed description): The Prioritization of Essentials Over Discretionary Items: Faced with potential price hikes, consumers are more likely to prioritize spending on essential goods like groceries and pet supplies while cutting back on non-essential items like electronics and apparel.

Big Social Trend (name, detailed description): Increased Consumer Awareness of Economic and Political Factors Affecting Spending: Consumers are increasingly aware of how macroeconomic factors and government policies can influence the prices they pay for goods.

Worldwide Social Trend (name, detailed description): Global Sensitivity to Price Fluctuations: Consumers worldwide are generally sensitive to price changes, and trade policies that impact prices can have broad global implications for consumer behavior.

Social Drive (name, detailed description): The Desire for Financial Security and Predictability: Consumers are driven by a need for financial stability and prefer predictable pricing, making them react negatively to unexpected price increases.

Learnings for brands to use in 2025:

• Understand Consumer Price Thresholds: Know the limits of how much price increases consumers are willing to absorb.

• Develop Contingency Plans for Tariff Impacts: Prepare strategies for managing potential cost increases due to tariffs.

• Focus on Value and Customer Retention: Prioritize building customer loyalty by offering value and addressing their concerns about price increases.

Strategy Recommendations for brands to follow in 2025:

• Negotiate with Suppliers to Mitigate Costs: Explore options for reducing costs throughout the supply chain.

• Consider Phased Price Increases: If price increases are unavoidable, implement them gradually to minimize consumer shock.

• Communicate Proactively with Customers: Keep customers informed about potential price changes and any value-added measures being offered.

Final sentence (key concept) describing main trend from article (which is a summary of all trends specified), and what brands & companies should do in 2025 to benefit from trend and how to do it. In 2025, the "Tariff-Wary Consumer" trend highlights a significant price sensitivity to potential tariff-induced increases, requiring brands to proactively strategize to absorb costs, enhance value propositions, and communicate transparently with consumers to maintain brand equity and loyalty in the face of market volatility.

Final Note:

• Core Trend: The Tariff-Wary Consumer: Heightened consumer price sensitivity and anticipated spending cuts due to potential tariffs.

• Core Strategy: Mitigate Price Increases and Enhance Value: Brands should focus on absorbing costs, offering value, and communicating transparently.

• Core Industry Trend: Impact of Geopolitical Factors on Consumer Markets: Global trade policies like tariffs can have a significant and direct impact on consumer behavior and retail markets.

• Core Consumer Motivation: Protecting Personal Finances and Seeking Value: Consumers are primarily motivated by the desire to maintain their financial well-being and get the best possible value for their money.

Final Conclusion: The ESW survey provides crucial insights into how U.S. consumers are likely to react to potential tariff-related price increases. The strong indication of spending cutbacks and the preference for alternative forms of value highlight the challenges that retailers and brands may face. In this environment, understanding consumer price thresholds, offering compelling value, and maintaining open communication will be essential for navigating the potential impacts of tariff policies on the consumer market.

Core Trend Detailed: description. The core trend, The Tariff-Wary Consumer, describes a significant shift in consumer sentiment and behavior driven by the anticipation of potential tariffs and their resulting impact on product prices. This trend is characterized by a heightened awareness among consumers regarding global trade policies and a proactive approach to managing their spending in response to perceived economic threats. Consumers are no longer passively accepting price changes but are actively evaluating their purchasing options, setting clear limits on the amount of tariff-induced cost they are willing to bear, and formulating contingency plans to reduce their overall expenditures if these price thresholds are crossed. This wariness reflects a broader concern about economic stability and a determination to protect personal finances in the face of potential increases in the cost of goods, particularly imported items.

Key Characteristics of the Core trend:

• High Price Sensitivity to Tariffs: Consumers have a specific threshold (around 10% increase) beyond which they are unwilling to pay more due to tariffs.

• Anticipatory Spending Adjustments: Consumers are already modifying their spending habits, such as pulling forward purchases or stocking up on certain items, in anticipation of tariff increases.

• Focus on Value and Alternatives: Consumers are actively seeking ways to mitigate the impact of potential price hikes, including looking for discounts, free shipping, and exploring different retailers or brands.

• Prioritization of Needs Over Wants: In the face of potential price increases, consumers are more likely to prioritize spending on essential goods over discretionary items.

• Information Seeking and Awareness: Consumers are likely paying more attention to news and information about tariffs and their potential economic consequences.

Market and Cultural Signals Supporting the Trend:

• ESW Survey Data: The survey results clearly indicate the price sensitivity of consumers and their planned behavioral changes.

• Media Coverage of Tariffs and Inflation: Extensive news coverage of these economic issues keeps them top-of-mind for consumers.

• Consumer Confidence Indices: Monitoring consumer confidence levels can provide further insight into their economic anxieties and spending intentions.

How the Trend Is Changing Consumer Behavior:

• Reduced Overall Spending: Consumers are planning to cut back on their total expenditures if tariffs lead to price increases.

• Shift in Purchasing Timing: Consumers are adjusting when they make purchases, potentially buying sooner to avoid higher prices.

• Increased Search for Deals and Discounts: Consumers will likely become even more diligent in seeking out promotions and lower prices.

• Greater Willingness to Switch Brands or Retailers: If their preferred brands or stores increase prices due to tariffs, consumers may be more willing to try alternatives.

Implications Across the Ecosystem:

• For Brands and CPGs: Need to develop pricing strategies that consider consumer price sensitivity to tariffs.

• For Retailers: May face pressure to absorb some tariff costs to remain competitive.

• For Consumers: Potential for increased financial strain if tariffs lead to significant price increases.

Strategic Forecast:

• The Tariff-Wary Consumer trend is likely to persist as long as there is uncertainty surrounding trade policies and their economic impact.

• Consumer behavior will continue to be heavily influenced by price considerations.

Areas of innovation (based on discovered trend):

• Pricing Algorithms that Factor in Tariff Risks: Retailers and brands may use technology to dynamically adjust prices based on potential tariff changes and consumer demand.

• Supply Chain Diversification Strategies: Companies may innovate their supply chains to reduce reliance on goods subject to tariffs.

• Consumer Communication Tools Explaining Price Changes: Retailers could use technology to clearly communicate the reasons behind any price increases due to tariffs.

Final Thought (summary): The Tariff-Wary Consumer trend underscores the significant impact that geopolitical factors can have on individual spending habits. As consumers anticipate potential price increases due to tariffs, their cautious approach to spending and willingness to seek alternatives present both challenges and opportunities for retailers and brands. In this environment, a deep understanding of consumer price sensitivities and a proactive approach to managing and communicating pricing strategies will be crucial for maintaining customer trust and loyalty.

Source: https://www.petage.com/survey-60-of-consumers-will-abandon-purchases-if-prices-rise-beyond-10-due-to-tariffs/