People working from home are spending less. How much are we saving and can online stores tempt us to splash the cash?
New Government figures show over a third of us worked at least one day from home during January, and nearly half of home workers said they were spending less. The home delivery expert ParcelHero says online retailers are best placed to tempt Brits to splash some of that saved cash.
New figures from the Office for National Statistics (ONS) have revealed that over a third of us are still spending at least one day a week working from home because of the pandemic. In the second half of January, 36% of us worked from home and almost half (46%) said not having to go to the office saved them money.
The home delivery expert ParcelHero says it’s great news that many people are still saving money on fuel, parking and commuting. Only 18% of workers think it is actually costing them more to work from their homes, despite the consequent increase in household heating and electricity costs.
ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘Half of all people lucky enough to keep working from home at least one day a week say it’s reduced their spending. 49% of all men and 43% of women report savings on transport and commuting costs.
‘The ONS has also tracked the amount of people at home or in the office against credit card usage data. The new report clearly shows there is significantly less spending on credit and debit cards during those periods when more people work from home.
‘In the period just before the second lockdown of 5 November 2020, the CHAPS Index, a measurement based on credit and debit card spending with major retailers, was quite high at 105.11. By the time the lockdown bit on 12 November, the CHAPS Index had slumped to 73.13.
‘However, we are not spending less in every area when we work from home. It’s interesting to see that, while we’re saving lots on transport, we’re not all saving money on food. Despite the drop in work lunches and sandwich purchases from expensive city centre delicatessens, 33% said they were actually spending more on food. Many of us are probably buying ourselves little treats to get us through the day.
‘Another area of expenditure that has gone up for some people is spending on internet providers. Almost a quarter of people working from home (24%) said they spent more on internet costs. In March 2021, the UK telecommunications regulator Ofcom reported increased average broadband speeds compared with November 2019, as households upgraded their internet packages because of mass home working and remote learning.
‘Crucially for retailers, you might think that increased home working and better broadband speeds would fuel a significant increase in online consumer spending, to counteract the fall in physical store sales. To some extent they have. Online spending represented 26.6% of the entire retail spend in December 2021. To put that into context, online sales were just 19.7% of all retail sales in February 2020 just before the pandemic hit.
‘However, the ONS data reveals that spending on cards decreases overall whenever home working rises. Even though we are likely to be online for long period when working from home, it seems we are not overtempted to browse Amazon, eBay or ASOS to compensate for lost physical store browsing time.
‘That is the real challenge for retailers. Many of us continue to stay away from offices and crowded city centres while Covid cases remain so high. If anything, the swift end to many Covid precautions has increased unease, particularly among the elderly and vulnerable. Online retailers need to work out how to tempt people who are saving significant amounts of money working from home into parting with it once again. With fewer people browsing stores during lunch hours, for example, there’s an increasing need for websites to become tempting shop windows.
‘Consumers working from home seem to have got out of the habit of browsing stores and impulse buying altogether – not just in physical stores. Websites need to rekindle the shopping habit in those of us working from home. Although, of course, that window shopping will be during our breaks and not in work time. Ahem.
‘To discover how e-commerce and physical stores can use technology to help survive the post-pandemic retail revolution, see ParcelHero’s study on the High Street of the future at: https://www.parcelhero.com/research/shop-of-the-future