Online Retail Jumps 13% Year Over Year as Shoppers Hunt for Value

Financial stress is no longer just shaping what Americans buy. It is reshaping how they pay.

That was the central insight of “Consumer Financial Stress Is Changing the Rules of Shopping and Payments,” a January PYMNTS Intelligence Data Book. The report found that while overall participation in grocery and retail categories remains steady, persistent cash flow gaps are driving changes in channel choice, payment method and risk exposure.

There’s a divide emerging between households under sustained financial pressure and those with more stable finances, according to the report. For merchants, banks and payment providers, the implications extend beyond consumer sentiment. They reach into checkout design, fraud management and product strategy.

Key findings from the report include:

Sustained financial stress, defined as often or always experiencing cash flow shortfalls, was experienced by 25% of millennials, Generation Z consumers and households with children. Among households with children, the rate was nearly double that of households without children.

In the 30 days before being surveyed, 30% of consumers made an online retail purchase, up 13% year over year, while in-store participation declined by six percentage points. Financially stressed consumers were more likely than their low-stress peers to shift groceries online.

In November, 15% of consumers used a digital wallet for a retail purchase, up from 11% in February. Among Gen Z, usage reached 36%, and financially stressed consumers were more than twice as likely as low-stress consumers to rely on wallets for purchases.

Digital channels are becoming tools for control, the report found. Online shopping allows easier price comparisons and access to promotions. Digital wallets provide real-time balance visibility and embedded pay-later features. For households managing tight cash flow, these features are not conveniences. They are safeguards.

The report also showed how stress changes risk dynamics. Overall, 15% of consumers experienced a payment decline in the 30 days before being surveyed. But those under high financial stress were nearly eight times more likely than low-stress consumers to report a decline. Digital wallet users faced elevated exposure as well, with nearly one-third reporting a decline. Insufficient funds and issuer-driven suspicious transaction flags accounted for roughly half of all declines.

These patterns matter for the broader payments ecosystem. Credit card usage declines among financially stressed consumers, while alternative methods gain share. That divergence signals a shift in how households think about liquidity and credit. Payment choice is becoming a budgeting tool.

At the same time, 62% of consumers overall reported low financial stress, with older and higher-income households more insulated. The consumer economy is not collapsing. It is fragmenting. A minority faces sustained pressure that is actively influencing behavior, while a majority continues to transact with relative stability.

For stakeholders across the board, the opportunity lies in responding to this split with clarity and innovation. Merchants can refine digital experiences that surface value and reduce friction. Banks can rethink authorization strategies and balance transparency. Wallet providers can strengthen trust while expanding responsible flexibility.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.