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MILLENNIALS LEAD THE WAY ON PRICE SENSITIVITY AS THE UK ‘ COST OF LIVING CRUNCH ’ BITES
The UK ’ s cost of living squeeze is making Millennials and younger demographics more sensitive to pricing and promotions , the latest research from antuit . ai , a leader in SaaS Artificial Intelligence ( AI ) demand forecasting solutions , has revealed .
The British Retail Consortium ’ s monthly monitor showed shop prices grew + 0.3 % year-on-year in November 2021 , up significantly on the -0.4% dip year-onyear the month before , as rising prices begin to intensify the UK ’ s cost of living squeeze . With inflation rising and consumers facing higher fuel and energy costs as well as increased taxes , the CEBR suggests typical UK households will each spend £ 1,700 more per year on costs in 2022 , putting downwards pressure on disposable incomes .
It appears this ‘ cost of living crunch ’ is increasingly impacting younger demographics of UK consumers . Original research of over 2,000 UK shoppers by antuit . ai showed Millennials were the most likely demographic to experience price sensitivity , with two thirds ( 65 %) of 25 – 34-year-olds saying they had become more responsive to pricing since the start of the pandemic , + 4 % higher than the average UK consumer .
Almost half ( 49 %) of Millennials had cut back on their grocery spend due to economic uncertainty , while 52 % had traded down from branded goods to own-brand products , compared to 21 % of 55 – 64-year-olds and just 13 % of those of 64 years of age . Meanwhile , 54 % of 25 – 34-year-olds cut back on fashion spending due to either job or financial uncertainties , + 12 % higher than the typical UK shopper .
RETAILERS ARE HAVING TO DRAW AN EVEN FINER LINE WHEN IT COMES TO PRICING AND PROMOTIONS .
Almost seven in 10 ( 68 %) of Millennials said they had become more responsive to promotions , according to antuit . ai ’ s poll , while a study by XCCommerce , showed 56 % of UK shoppers cited discounts are the most important factor when considering where to buy , increasing to 70 % amongst 18 – 24-year-olds .
Yogesh , Kulkarni , Co-CEO at antuit . ai , said : “ Faced with rising sensitivity among consumers prompted by the cost-ofliving squeeze , retailers are having to draw an even finer line when it comes to pricing and promotions – while they must drive demand , on the one hand , ensuring consumers aren ’ t priced out of remaining loyal , they must closely manage margin protection on the other .
By intelligently optimising pricing , markdowns and promotions , based on demand triggers , retailers can make the granular decisions needed at each store location to increase sell-through and protect margins , while meeting consumers expectations on prices and discounts .” x
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