This year, Slide 101 of Mary Meeker’s annual Internet Trends Report has a simple message: “Making Ends Meet = Difficult.” The bad news continues on the next slide, which states that household debt is at its highest level ever, and it’s rising. People are saving less (3 percent of personal income versus 12 percent 50 years ago) and the debt-to-income ratio is going up (to 22 percent from 15 percent over the same time frame). Many culprits are responsible for this shift, and we can thank technology for making it easier than ever to spend money. Innovations like one-click checkout, browser credit-card storage, and Amazon Dash buttons are swiftly eliminating the roadblocks that stand in the way of people purchasing things. And while these innovations are certainly creating a future when one’s wants and needs can turn into stuff without interruption, it’s also altering how people think about spending and saving (or rather, failing to save) money.
The endgame, says Ricardo Belmar, senior director for Global Enterprise Marketing, will be a world in which people don’t even realize they’re buying things. “Amazon must be thinking this way,” says Belmar, who has been analyzing the world of consumer payment and retail technology for years. “When you think about Dash buttons, Echo devices, they’re meant to make it so easy it’s second nature. You want something, you get it. The ultimate consumer means you can consume anything you want, anytime you want, anywhere you want.” Belmar recalls a comment from an Amazon payments executive at a conference last year: The best way to remove friction from the checkout process is to eliminate the process itself. Thus, the Amazon Go store, where shoppers simply pick up an item and walk out the door. “How much easier does it get than that?” Belmar asks.
Before voice assistants and checkout-free stores, less flashy features like credit card and address autofill started moving consumers down a path of mindless consumption. “There was a time when every time you went to do a transaction you had to enter in all of your payment information,” Belmar says. “That had to have been a pretty significant hurdle.” Advancements in network connectivity have also quietly changed the purchasing experience. Both online and brick-and-mortar retailers have benefited from better and faster internet that enables better and faster payment transactions.
These improvements laid the groundwork for an increase in mobile shopping. Take, for one example, the mega sports merch online retailer Fanatics, where mobile shoppers accounted for 58 percent of all sales over the past month, a jump of 7 percentage points over the same time frame last year. Fanatics chief technology officer Matt Madrigal says connectivity and speed have wildly improved the company’s ability to serve customers, especially during huge surges in demand. In the past year, Fanatics has rolled out a new cloud commerce platform, which uses elastic computing so it can scale quickly when customers descend on the site, whether via mobile or desktop. “So when we have concurrent users who are on their smartphones buying the locker room jersey or whatever’s hot, the site actually gets faster with more demand,” Madrigal says.
The extra convenience isn’t just changing the online shopping experience, it’s also affecting buyer psychology. Belmar says that people have changed from being active shoppers to more passive consumers. “If you make it so easy you don’t even realize you’re buying something, that’s probably as easy as you can make it,” he says. The frustrating hurdles that might’ve in the past prevented people from acquiring items they want are being taken out of the equation, changing the process entirely. Shopping feel distinctly like … not shopping.
Saving time has also become incredibly important to consumers. “The Quest for Convenience has never been greater,” a recent Nielsen white paper explained, also labeling it “the ultimate currency.” The more chaotic and stressful people’s lives are, the more they may choose to value time over money. Consequently, retail strategies are less focused on price-cutting and more on maximizing efficiency.
Prioritizing efficiency has also discouraged consumers from useful (but time-sucking) activities like comparing prices and researching options. In a recently published 10-year analysis of consumer spending habits, University of Chicago economists found that comparison shopping is down, while specialized buying—or the purchase of specific products instead of general-use products—is on the rise. (The researchers used the example of buying Tostitos Scoops instead of regular tortilla chips.) Essentially, businesses don’t have to compete for buyers’ dollars in the way they used to, because consumers don’t exercise as much flexibility as they could: They find something they like and continue buying it, regardless of whether it’s at the best price. In response to this, companies are creating more and more specific product lines, which retains consumers and gives manufacturers the pricing power. The article and study both mention that subscription services and the complications of canceling those agreements have also affected consumer spending habits.
Specialized tastes, a great desire for convenience, and fewer purchasing pain points make a perfect recipe for increased consumer spending and corporate profit. Most likely, it’ll be up to consumers to rewire their brains—if they have the time and means to rethink the way they spend. As buying has become more intuitive, it’s also become easier than ever to monitor and access their money. “At some level everybody’s got to reach that right educational moment where they realize, ‘I’ve got access to all these tools,’” Belmar says. “Not only can I buy things easily, but I can also control my money really easily. People are going to have to make that mental connection.”
There are technologies trying to help people connect those dots. Mint, a service that automatically collects and analyzes users’ financial habits to help them budget better, was founded in 2006. Still, a company spokesperson says that 37.8 percent of users who set a monthly budget exceed it; of those, 16.25 percent exceed it by 40 percent or more. Mint recently launched a new tool called Mintsights, which acts as an adviser rather than just a data provider. “Most people don’t want to face the reality that they may not be making the best financial decisions,” a spokesperson says via email. Users who opt into Mintsights get tips about making financial decisions and receive personalized advice when they begin to reach their spending limits. While these tools may not be as present or alluring as the onslaught of new digital spending methods, it will be to consumers’ benefit to seek out and use them.
An earlier version of this story misstated the difference between the percentage of Fanatics’ mobile sales in the past month and mobile sales over the same time frame in 2017. It was 58 percent in the past month and 51 percent over the same time frame last year.