The economy’s role in major purchases: Why shoppers delay, downgrade, or finance
Shoppers are facing tough choices in today’s economy, especially when it comes to essential, big-ticket items. Learn how inflation and financial uncertainty affect purchase timing and quality – and what merchants can do to meet customers where they are.
Key takeaways
Economic concerns are driving purchase delays. Consumers often postpone a major purchase due to financial worries.
Lower credit scores often lead to trade-offs. Many shoppers settle for lower-quality items to stay within a tight budget.
Sales events and inflation fears accelerate buying. Consumers often move up their purchases to avoid price hikes or take advantage of limited-time promotions.
Financing helps bridge the gap. Offering more ways to pay empowers shoppers to get what they need, when they need it.
Waiting to get what you need is never easy, especially if it’s an essential item such as a mattress, refrigerator, or set of tires. For those with low or subprime credit, delaying a purchase – or getting a lower-quality item – is often part of making a major purchase.
Purchasing decisions for those with less-than-perfect credit are just as much about what they can pay for right now as what they want. Snap Finance’s new study, “Closing the Credit Gap: Major Purchase Study,” found that 38% of consumers with credit scores below 670 delayed a major purchase due to their financial situation or concerns about the economy, compared to 24% of those with higher scores.
And when money is tight, people with lower credit scores are more likely to shop out of necessity – to replace furniture in disrepair or fix a car that isn’t working, for example. These trends, including delayed purchases, mean that when customers with credit challenges walk into your store, their need is often urgent.
The economic impact on shopping
The current economy adds more complexity. Snap Finance found that 30% of all consumers made a major purchase sooner than planned because they worried about prices going up due to inflation. When consumers see prices climbing for everything from groceries to gas, they may decide it’s better to buy that new washing machine now – if they’re able – before it becomes even more expensive.
Often the economic pressures credit-challenged consumers face sometimes force difficult compromises: 26% of those with lower credit scores purchased lower quality items due to their financial situation or economic concerns, compared to just 16% of those with higher credit scores, according to Snap’s survey.
When money is tight and financing options are limited, consumers may feel forced to choose downgraded purchases, including products or brands that might not serve their long-term needs. They may settle for a cheaper, lower-quality version that fits their immediate budget or is in stock, leading to frustration and the need for another replacement sooner than expected.
Other global factors, including tariffs, can also influence the cost and availability of goods, further complicating a customer's decision-making process.
What’s behind these trends and what do they mean for your business? Let’s dive in to learn how shoppers are navigating financial uncertainty, how the economy is shaping the holiday shopping season, and what you can do to meet your customers where they are with pay-over-time options for all credit types.
Holiday promotions and the urgency to buy
Strategic promotions have a powerful effect. Snap Finance found that 30% of all consumers purchased sooner than planned due to limited-time sales or promotions. Especially during the busy holiday shopping season, a good deal can often motivate shoppers across of all credit types to open their wallets.
Events like Black Friday and Cyber Monday create a sense of urgency that can motivate even the most cautious shoppers. For customers who have been delaying a purchase, the holidays can feel like the perfect time to finally get what they need. The Q4 promotions you run can directly appeal to the nearly 1 in 3 consumers who are motivated by limited-time offers – and those who have been waiting for the right price.
But don’t forget the financial pressure many of your customers are under. While a big sale is attractive, the upfront cost of a major purchase can still be a barrier for many, especially those with lower credit scores. They may see a great deal on a new living room set but not be able to pay for it upfront and may not qualify for traditional financing.
That’s why your messaging during the holidays needs to go beyond just advertising a percentage off. Your promotions should communicate value, flexibility, and understanding. By combining your sales with accessible financing options, more customers can get what they need now. This transforms a holiday sale from a tempting but out-of-reach offer into a real, achievable solution.
Responding with financing and value messaging
In this economy, you can stand out. When shoppers feel understood and supported, they are more likely to become loyal, repeat buyers. Here are practical steps you can take to adapt your strategy to better serve customers, especially those with less-than-perfect credit.
1. Make alternative financing options available
The single most effective way to help customers overcome financial hurdles is to offer access to more ways to pay. For shoppers who have been delaying or considering downgrading a purchase, financing can be the bridge that allows them to get the item they want, right when they need it.
But what happens when shoppers are turned down for traditional financing? Alternative financing, including Snap-branded lease-to-own and loan options, can bridge the gap. Snap Finance found that among consumers with lower credit scores, 78% have been turned down for financing – up 2% from the previous year. When others say no, be ready to help with alternative financing, such as Snap-branded lease-to-own or loan options.
2. Promote financing options online and in-store
Don’t let motivated buyers walk away empty-handed because simply because they don’t know about options to pay over time. Be upfront during the sales process about all available financing and make it clear what financing is available to your customers. Avoid creating a barrier that keeps customers from getting what they need – and causes you to lose a sale.
Use point-of-purchase signage along with web banners to promote financing options for shoppers. Make sure your sales team is well-versed in available financing options, including Snap Finance solutions, and can easily walk customers through the application process for each. When your team is confident, your customers will be, too.
Snap Finance offers no-cost point-of-purchase signage, marketing resources, social media campaigns, and web banners to its merchant partners.
3. Pair promotions with financing
Your sales and promotions are already designed to create urgency. You can make them even more powerful by promoting the financing options available at your location. For example, social media campaigns can generate buzz for your business. Use Snap’s free social media graphics to let customers know they can use Snap Finance solutions when they shop your store.
Apply this strategy to all your big promotions, from holiday sales to seasonal clearances. Train your sales associates to lead with financing as a solution. When a customer seems hesitant about the price, your team can pivot the conversation to paying over time. This proactive approach can save sales that might otherwise be lost.
4. Emphasize long-term value
When customers are considering purchasing a lower-quality item than what they were hoping for, it’s usually because they’re focused on the short-term cost. Help them see the bigger picture. By highlighting the long-term value of investing in a quality product, you can help them make a decision that may be better in the long run for them.
Use your marketing and in-store displays to talk about durability, warranties, and performance. For example, a more expensive refrigerator might have better energy efficiency that saves money on electricity bills over time. A higher-quality sofa will last for years, while a cheaper one might need to be replaced in half the time.
Bundling products or including extended warranties can also increase the perceived value. A customer might be more willing to finance a slightly more expensive laptop if it comes bundled with software and a 3-year protection plan.
5. Time your marketing to match customer needs
Since we know that many credit-challenged customers shop out of necessity, you can tailor your marketing to align with these moments. For example, run promotions on tires and auto repair services during months when people are planning road trips. Market new air conditioning units and refrigerators during the hot summer months.
By anticipating when essential items are most likely to fail or be needed, you can present your store and available financing options as the go-to solution when they need it most.
Grow your business with Snap Finance
Navigating the current economic landscape requires more than just good products and competitive prices. It requires a deep understanding of your customers' financial realities and a commitment to providing real solutions.
When you fail to offer and promote financing options for customers, especially in today’s economy, you’re hiding one of your best sales tools. With Snap Finance, you open your doors to a larger segment of the market – shoppers who are ready and willing to make a major purchase but need an alternative to traditional financing.
Don't let another sale walk away. Start the conversation about financing and watch your business grow with Snap Finance.
Read our full study, “Closing the Credit Gap: Major Purchase Study” to learn more about how businesses like yours can help bridge the credit gap for more customers.
Check out these additional resources from Snap Finance:
Not a Snap Partner? Learn more about partnering with Snap Finance.
Snap-branded product offering includes retail installment contracts, bank installment loans, and lease-to-own financing. For more detailed information, please visit snapfinance.com/legal/products