Budgeting and buying are personal, with different approaches often driven by age  

At the end of each year, as shoppers spend more for the holidays, many will revisit the coming year’s shopping plans. It’s a time for them to think about how best to approach the year ahead. Some might use budgeting software to see where their money is really going. Others may take a more “seat of the pants” approach. Many factors will come into play, from hard-nosed financial facts to more whimsical wants and desires. What do we need? What do we want? And how much cash is there to go around?

In our first new survey of 2024, we wanted to find out how online shoppers think, so we asked about budgeting processes and the categories and channels where they anticipate purchasing. We surveyed 2,122 online shoppers in January to get a read on their behavior.

The majority of online shoppers don’t budget 

56% of those surveyed admit they aren’t budgeters. The most significant response group at 38% was in the No Budget column — they don’t follow a strict budget but acknowledge they have a sense of what they spend. The remaining 18% have no budget and fluctuate based on wants and needs. 

The remaining 44% do some budgeting. Only 6% budget early and stick to the plan no matter what, whereas 25% review and adjust throughout the year. 

For most shoppers, only a fraction of their budget will go to non-essential items 

Despite what Instagram might suggest, shoppers prioritize needs over wants. The perception is that everyone splurges, but only 17% of consumers said that over half of their purchases will be wants. At the top of the chart, you might expect to see the group that had a mix of wants and needs. But, just 27% of survey respondents fall into the category. This year’s consumer is all about needs. 

Sometimes, it’s hard to tell a need from a want and they vary by individual. You might need a dishwasher. But do you need this dishwasher? Or a dishwasher now? Nuance matters. Everyone needs shoes, but how many pairs do we really need? Can Gucci loafers count as business casual? Ultimately, we can’t know what customers mean when they say they only buy what they need. (But we can be sure it’s a lot less fun.) The same purchase can be a need for one person and a want for someone else. 

1 in 3 shoppers expect their wants to be between 11% and 49% of total spending

We wanted to see if shoppers of different ages had varying levels of wants and needs. We broke their wants into 3 different groups:

• 10% or less

• 11%-49%

• More than 50%

Despite a few variations, wants don’t vary much by age. Those aged 18-24 were most focused on wants as their lives tend to be much simpler, unencumbered by needs that come with age.   

74% of shoppers know what they plan to buy in 2024

26% are unsure what they will buy next year. Most budgets lead with food. Beyond that, it’s the categories we expect to find: clothing, home, and health and beauty. These 3 categories are predicted to see top-5 spending among at least 1 in 5 online shoppers. 

Retailers can take advantage of this behavior as needs and wants fluctuate throughout the year, opening up new selling opportunities.

The gender gap

Most purchases were relatively similar between males and females, but some differences stood out. Pay attention to the gender gap column, which is calculated based on female vs. male anticipated purchases. Food saw women spend the highest, as they often take the lead in grocery shopping. Clothing has long been a category in which women have a greater interest and bigger budgets. The health-and-beauty category also saw similar patterns. Those three categories with the largest gender gap topped out at 19%, but most others are in the single digits. Categories where men have greater interest are electronic technology (-14% gap) and sporting goods and outdoor products. We might expect a narrower gap on the latter, but perhaps females allocate those dollars to clothing/shoes.   

The age factor

Age reveals exciting findings on the spending front as well. At least a quarter of those 45+ are unsure what their top categories might be. Experience has probably taught them that spending needs to change over the course of a year.    

Category insights include:  

• Clothing:  Draws strong interest from younger shoppers, while purchases drop after age 45, when the need for the latest and greatest fashions tends to wane 
• Health and beauty:  22% average with robust spending among those 18-29 with declining interest among those 50+
• Toys and baby:  Strong interest in the family-building years, with the 25-34 group garnering the greatest attention and budget 

Online shopping will be the status quo 

6 in 10 online shoppers anticipate they will purchase about the same online in 2024 as they did in 2023

No matter the age group, about the same level of spending consistently topped the list of future shopping plans. Those most likely to have higher spending were in the 18-39 segments, though the 25-29 group was a surprise exception. Their comfort with the channel and overall spending behavior likely drove those results.   

Convenience causes online spending to be higher 

Shoppers’ reasons for higher online spending are where this gets interesting: 

• 50% prioritize convenience
• 42% chose time-savings
• 29% thought online prices were better
• Just under a third each thought the online product range was better or liked that they could use a mobile device

Lower overall spending means lower online purchasing

According to 61% of those surveyed, less online spending is just a symptom of lower spending overall. While many have shifted to online shopping, 14% of those who don’t just prefer to shop in brick-and-mortar stores, and 5% suggest they are overwhelmed by the online experience. 10% blame their resistance to in-app shopping.

Shoppers find many reasons to alter their online buying behavior

Once again, the “other” reasons provide the color. We’ve grouped them based on three dynamics: circumstances, money/economics, and channels. For those who expect to spend more and those who are more frugal, these insights can help retailers understand the why behind their behavior. 

Know your customer Q&A

Capitalizing on shoppers’ wants and needs is a tough assignment. Perhaps the upside opportunity comes from knowing our customers better. That means understanding their online channel behavior, the categories they intend to buy, and more. Revisit the why and ask yourself if you’re well-positioned to get their business.

• Is it convenient to shop on our website?
• Will features we intend to add end up saving our shoppers time?
• Are the products we sell top-of-mind and organized to garner interest among your visitors? 
• Are our prices competitive with those in our category and the industry?
• Is our mobile experience optimized for on-the-go shoppers?