The expectation when inflation and living costs rise is that retail sales drop. But is this the case in eCommerce, or does it enjoy a protective buffer compared to other sectors? While some sectors suffer disproportionately during times of struggle, others can flourish. According to research shared by Channel Advisor in August 2022, 77% of respondents from an international study were spending the same, or more, on eCommerce compared to last year. This was a trend seen across the board accounting for small fluctuations between regions. What this reflects is a diversion of spend from pricier retail stores to greater cost-saving and cost-comparison eCommerce retailers, and this trend is consistent around the world.


Brand Loyalty

This effect poses a challenge for brands. Loyalties are more easily challenged in times of austerity as consumers can abandon their support in favour of cheaper alternatives. Price pressures can cause even the most loyal customers to re-evaluate and abandon the brands they once loved. According to research by Merkle “even of those who define themselves as brand loyal, 76% say they would still buy from competitors if it were cheaper or more convenient to do so”. McKinsey also reports that this behaviour shift began during the pandemic, with 39% of consumers changing brands or retailers, and 79% of those intending to continue exploring retailer options as the new norm. Unlike pre-COVID-19 times, consumers across all income groups are now inclined to seek lower prices and greater convenience.



Marketplaces are the logical next step for consumers to leverage in this cost comparison era. In fact, 76% of global consumers say they are already regularly using multiple marketplaces for browsing and buying. Benefits that lean in favour of rising inflation cost shopping trends include easy access to single-item ordering, easy shipping and returns policies, and ease of access and price comparisons for items from local and international locations. They are a one-stop shop for price-wary and time-short consumers. Emerging marketplaces are also proliferating around the world, making it increasingly simple for consumers to access low-cost, easy shopping in times of economic strain. On our Podcast, we spoke with Tony Preedy of Fruugo about the rise of the Marketplaces and how they are shifting consumer shopping behaviours.



Rising inflation contributes to an increased economic strain on consumers, and subsequently on businesses. But not all sectors are affected equally. It would seem that eCommerce has a protective buffer in the form of ease and competitive pricing and comparison, that allows it to thrive in these austere times. Demand remains on the increase, although it may be too soon to predict how this will track over the next 12 months. Brand loyalties will be tested during high inflation periods, as consumers reassess and abandon their support in favour of cost savings.

As a result of this, marketplace selling, which is already accelerating within eCommerce, is continuing to deliver for retailers as it provides a simple way for consumers to search, compare, order and return their merchandise. The moral of the story is? Rising inflation costs do not necessarily equate to doom-and-gloom outcomes for retailers or brands. eCommerce offers some protective elements compared to traditional retailing, particularly the marketplace model. Consider your resilience strategy, and how you can (potentially) incorporate marketplace selling into your business model.