US: What makes American consumers shop from deep discount retailers like Temu?

• Americans are most encouraged by lower prices to shop from sites like Temu; product variety follows at a distant second.
• Product quality most pressing concern among consumers when buying from deep-discount sites

The US is no stranger to deep-discount retailers. Shein for instance launched in the US in May 2022, a couple of months before Temu did and consumers caught themselves in a fast-fashion whirlwind. Deep-discounting is a customer acquisition tactic used by ecommerce brands new to the market. Not only do deep discounts draw in curious, price-sensitive consumers: they also encourage those customers to make their initial purchases.

However, there are some disadvantages to deep-discounting. It can encourage a race to the bottom in terms of prices or even give shoppers a perception of lower value products. In an earlier piece, we looked at Temu’s awareness levels among Americans. Now we see whether an affordable price tag is the only motivation for consumers to shop from ecommerce sites like Temu.

Mostly money, a little bit of variety: What motivates shoppers to buy from sites like Temu

While lower prices are the top motivation, consumers are also keen to shop from sites like Temu to try new products.

Lower prices motivate American consumers the most to purchase from discount retailers like Temu – nearly half of all consumers in the US (48%) say so.  At 45% compared to 51%, men are a little less likely than women to say they’re motivated by lower prices, but lower prices are nevertheless what motivates this group the most.

Being able to find a wider variety of products appeals to 26% of those polled, while 21% turn to such sites to discover new products. Nearly one in five consumers (19%) shop from sites like Temu to purchase novelty products.

Men are more likely than women to turn to Temu and similar discount online retailers to discover new products (24% vs. 19%), while women are more likely to satisfy their curiosity to try new sites (16% vs 13%).

Anything new, as attractive as it may be, is bound to bring certain apprehensions. We asked consumers if at all they have any concerns before shopping from a new ecommerce site.

Being doubly sure: What consumers are concerned about when buying from new ecommerce sites

Most Americans research new ecommerce sites before making purchases, majority of them are worried about product quality.

Survey results reveal that three in five American adults (60%) often research newer ecommerce sites before buying from them. Women are more likely than men to research new sites before making purchases on them (63% vs. 56%).

The survey revealed that a majority of Americans are concerned about the quality (72%) of the products on new retail websites. When asked how much they would say they trust deep-discount ecommerce sites to provide good quality products, more than a third of consumers (35%) say not very much and a further quarter (23%) do not trust such sites for good quality products at all. But a quarter of consumers in the US (25%) say they trust discount online retailers ‘a little’ to provide good quality products.

Besides product quality, consumers are also concerned about long delivery times (45%) and no exchange, returns or refund policy (42%) when buying from new ecommerce sites. Men seem more concerned than women about unclear customer service processes (43% vs. 34%) offered by new ecommerce sites.

Women on the other hand are more likely than men (49% vs. 35%) to be concerned about the sites unethically aggregating their products or associating with manufacturers who employ unethical production practices - a persistent allegation against Temu, in recent times.

Bottom line

If nothing else, deep-discount ecommerce sites bank mainly on their ability to offer a variety of products at rock bottom prices as their USP. And consumers are here for it as well. While people don’t seem to entirely expect such sites to sell them top quality products, it’s still a pressing concern for them. Add long delivery times, unclear exchange policies, unethical means of sourcing products and inconsistent customer service to the mix, and deep-discount companies have more than a handful of bottlenecks to sort before they become consumers’ go-to solution for all things retail.

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Methodology:

YouGov polled 700 US adults online on March 27-28, 2024. The survey was carried out through YouGov Surveys: Self-serve. Data is weighted by age, gender, race, political affiliation, education level and region. Learn more about YouGov Surveys: Self-serve.

Photo by Nataliya Vaitkevich on Pexels