Insights On Consumer Behavior During Economic Shifts

The early signals are here. And they look familiar. We’re seeing the return of two major patterns on Amazon: 📉 Consumers are trading down 📦 Some categories are showing stockpiling behavior This moment reminds me of early COVID—lagging economic impact, real-time shifts in behavior, and executive teams urgently revisiting their assumptions. At Momentum Commerce, we analyzed the top products on Amazon and found that the 𝐚𝐯𝐞𝐫𝐚𝐠𝐞 𝐬𝐞𝐥𝐥𝐢𝐧𝐠 𝐩𝐫𝐢𝐜𝐞 (𝐀𝐒𝐏) 𝐢𝐬 𝐝𝐨𝐰𝐧 𝟎.𝟖% 𝐲𝐞𝐚𝐫-𝐨𝐯𝐞𝐫-𝐲𝐞𝐚𝐫. But it’s not because brands are lowering prices. It’s because 𝐜𝐨𝐧𝐬𝐮𝐦𝐞𝐫𝐬 𝐚𝐫𝐞 𝐜𝐡𝐚𝐧𝐠𝐢𝐧𝐠 𝐰𝐡𝐚𝐭 𝐭𝐡𝐞𝐲 𝐛𝐮𝐲. 🔹 In 𝐃𝐢𝐚𝐩𝐞𝐫𝐬, historic top sellers (which have raised prices +6.0% YoY) are losing share to cheaper alternatives—today’s top sellers are down -3.9% in ASP. 🔹 In 𝐕𝐚𝐜𝐮𝐮𝐦𝐬 & 𝐅𝐥𝐨𝐨𝐫 𝐂𝐚𝐫𝐞, ASPs for historic best sellers are up +14.4% YoY—consumers are shifting to more affordable models. 🔹 In 𝐒𝐤𝐢𝐧 𝐂𝐚𝐫𝐞 𝐚𝐧𝐝 𝐏𝐞𝐭 𝐒𝐮𝐩𝐩𝐥𝐢𝐞𝐬, we’re still seeing pricing resilience. These are the “affordable luxuries” consumers are holding onto—for now. 🔹 And in 𝐁𝐚𝐛𝐲 𝐅𝐨𝐫𝐦𝐮𝐥𝐚, we just saw a 26x week-over-week unit sales spike. That’s a clear sign of stock-up behavior taking root. Brands are responding—fast. The smartest ones are running the playbook we saw work in 2020: 1️⃣ Renegotiating with suppliers 2️⃣ Raising prices selectively on inelastic SKUs 3️⃣ Accelerating shipments before tariffs hit harder 4️⃣ Tracking consumer behavior weekly, not quarterly And yes, this all reminds me of Hitchhiker’s Guide to the Galaxy. The cover famously reads: “Don’t Panic.” For brands right now, it’s a useful mantra. But it only works if it’s followed by a plan. We’re helping our clients write that plan: ✅ Real-time category pricing trackers ✅ Trade-down indicators ✅ Margin risk diagnostics ✅ One-on-one strategy sessions and playbooks Our data tells the story. Our job is to help you write the next chapter.

This analysis of consumer behavior in response to tariffs as of March 13, 2025, highlights significant shifts in purchasing patterns, industry impacts, and economic sentiment. Here’s a more structured breakdown: 📊 How Tariffs Are Shaping Consumer Behavior in 2025 1️⃣ Higher Prices for Imported Goods Tariffs increase the cost of imports, leading to higher prices for consumers. Industries most affected: Food & Beverage: Rising food import costs impact groceries and restaurants. Alcohol Industry: European wines and spirits face potential steep tariff hikes. Consumer Goods & Electronics: Higher costs for imported raw materials and components. 2️⃣ Shifting Purchasing Patterns Faced with rising prices, consumers are adapting in different ways: ✔ Buying domestic products to avoid tariff-inflated costs. ✔ Exploring alternative markets (e.g., purchasing from countries not subject to tariffs). ✔ Reducing consumption of tariff-affected goods, leading to potential demand shifts. 3️⃣ Consumer Sentiment & Potential Boycotts Trade disputes and tariffs fuel negative consumer sentiment. Potential boycotts of goods from countries involved in trade conflicts. Emotional responses to trade policies are influencing shopping decisions. 4️⃣ Economic Uncertainty & Spending Habits Tariff-related trade tensions create widespread uncertainty, leading to: ✔ Reduced consumer spending due to concerns over inflation. ✔ Increased savings as households brace for possible economic slowdowns. ✔ Delayed major purchases in categories like automobiles and electronics. 5️⃣ Factors That Will Shape Future Behavior Tariff severity & duration: Long-term tariffs may permanently alter consumer habits. Political climate: Policy shifts and trade negotiations can quickly change outlooks. Public perception: How tariffs are framed (protectionism vs. economic burden) will influence consumer reactions. 🔎 Key Takeaway Consumers in March 2025 are highly adaptive, making strategic purchasing decisions to mitigate tariff impacts. Industries reliant on imports, particularly food, alcohol, and retail, are bracing for significant changes. Would you like insights on specific industries or regions? 🌎

As we approach the end of Q1 2025, I've been closely analyzing the state of the consumer, and it's clear that significant economic pressures and shifting financial priorities are shaping the landscape. While there's some good news, like moderate growth in personal income, the rising debt levels and affordability challenges are creating real hurdles for consumer confidence and spending behaviors. These tensions will exist for the rest of 2025. In my experience, businesses that deeply understand these complexities will be better positioned to respond effectively and thrive. Economic Indicators: - Personal Income Growth: Up 7.8% year-over-year in 2024, with real disposable income increasing by 4.4%. - Credit Card Debt: Reached record highs, now 8% of disposable personal income, intensified by rising interest rates. - Housing Affordability: Income needed to buy an average home increased by 79% since 2020, outpacing wage growth significantly. - Inflation: Official rate moderated to 2.5%, but food costs have surged 58% since 2019, squeezing household budgets. - Interest Payments: Personal interest payments nearly double the historical average, highlighting financial strain. - Debt Delinquency Rates: Rising steadily across credit cards, auto loans, and mortgages, indicating growing consumer distress. - Savings Rate: Remained flat at 4.7%, with total personal savings down by 4.8%. Consumer Sentiment & Spending Behavior: - Consumer Sentiment: Fell to its lowest level since November 2022, reflecting deepening pessimism about personal finances. - Financial Stress: Over half of households describe their finances as "overextended" or a "balancing act." - Spending Shifts: Significant declines in non-essential purchases—garden furniture (-48%), home exercise equipment (-28%), and gaming consoles (-11%) since 2021. - Key Concerns: Healthcare costs (68%), housing affordability (66%), violent crime (60%), and identity theft (59%) weigh heavily on consumer minds. Conclusion: Consumers in 2025 face substantial financial pressures and shifting priorities. Businesses addressing these challenges with innovative solutions—cost savings, digital tools, or enhanced security and wellness experiences—will be positioned for success. How is your business adapting to meet the needs of today's consumer? #ConsumerInsights #Economy2025 #Inflation #Affordability #ConsumerBehavior