One-third of US consumers report decreased spending in Q2 2024: Report

One-third of US consumers reported a decrease in spending, while approximately one-quarter indicate an increase, according to Jungle Scout's Consumer Trends Report comparing the second quarter (Q2) to Q1 2024. These spending changes are consistent across overall and online shopping.

Overall, more consumers reduced their spending this quarter than increased it. Notably, spending on clothing and shoes saw a quarter-on-quarter decline of 7 per cent.

Spending among Gen Z shoppers increased more than any other generation, both online and overall. In contrast, Gen X shoppers were the most likely to have spent less overall, while Millennials were most likely to have reduced their online spending. For all generations except Baby Boomers, online spending rose more than overall spending. Baby Boomers were the least likely to have altered their spending habits in Q2 compared to Q1, as per the report.

Out of 19 Amazon categories, 13 experienced sales increases from Q1 to Q2, with growth ranging from 2 per cent to well above 50 per cent. Cost-conscious consumers flocked to sites like Temu, with 26 per cent more shopping there in Q2 compared to Q1. In response, Amazon announced plans for a budget storefront for Chinese sellers to compete directly with platforms like Temu and Shein.

In-store and online shopping at Home Depot surged by 24 per cent and 54 per cent, respectively, as consumers purchased supplies for summertime projects. However, inflation's stronghold on spending remains evident. From Q1 to Q2, the percentage of consumers reporting inflation's impact on their spending habits increased, as did the percentage concerned about their finances. A generational breakdown reveals that three-quarters or more of every generation say inflation has altered their spending. Compared to Q1 2024, nearly 10 per cent more consumers now say inflation has impacted their spending, and they are worried about their family's finances.

Millennials and Gen X are the most concerned about their family or personal finances. Nearly 90 per cent of Millennials report that their spending has been affected by inflation, and more than half say their household income is unstable, higher than any other generation.

Amazon remains the most popular starting point for online product searches, although this number has declined over the past two years. This decline is likely due to the emergence and growth of other players in the ecommerce space, including social media channels and major retailers like Walmart.

Social media shopping's popularity is rising rapidly. Compared to Q1 2024, over 20 per cent more consumers say they are likely to buy directly from social media channels. Gen Z is the most likely generation to start an online product search on a social media channel. Millennials are the most likely to start an online product search on Facebook. Baby Boomers prefer search engines like Google, while Gen X is most likely to start on Amazon or Walmart. For social media product searches, Gen Z favours TikTok, Millennials prefer YouTube, and both Gen X and Baby Boomers turn to Facebook. Gen Z is the least likely generation to start online product searches on Amazon.

Fibre2Fashion News Desk (DP)