Two in Three Consumers Cut Back on Convenience Services Over Cost Concerns

Amid persistent financial pressures impacting a majority of U.S. households, the decision to spend on time-saving convenience services is increasingly subject to a stringent financial calculus, according to a new report from PYMNTS.

The report, titled “How Do Consumers Weigh Convenience Services Against Financial Pressure? It’s About Buying Time,” is based on an exclusive PYMNTS Intelligence survey of 2,878 U.S. consumers conducted in January.

It examines how individuals across different financial lifestyles, particularly the prevalent paycheck-to-paycheck segment, navigate the trade-off between time and money when it comes to services like grocery delivery, home maintenance and personal care.

The research highlights that while these services offer valuable time savings, their cost represents a significant barrier to adoption and continued use for many consumers, especially those facing financial constraints. Economic uncertainty means vulnerable income groups constantly evaluate their spending, with 67% of all consumers living paycheck to paycheck as of January.

The report explores who uses convenience services, why some consumers cut back, and what factors would increase adoption. It reveals that accessibility and the ability to pay are the primary drivers of usage.

While saving time and reducing stress are strong motivations for using these services, the ability to afford them ultimately dictates whether consumers can put this desire into practice. The report underscores that cost concerns outweigh other elements like service quality when consumers decide whether to use or cut back on these services.

Key data points from the report include:

Spending Variation by Geography and Financial Status: Urban consumers spend an average of $234 per month on convenience services, benefiting from greater service availability. This contrasts with rural consumers, who spend $186 monthly. Paycheck-to-paycheck consumers facing issues paying bills allocate significantly less, averaging $171 per month on these services.

Discretionary Services Reveal Financial Divide: While widely adopted services like grocery and restaurant delivery show relatively similar usage across various financial lifestyles (both at 55% overall adoption), other services reveal a sharper financial divide. For example, consumers not living paycheck to paycheck are significantly more likely to use home maintenance (34% vs. 25%), lawn care (32% vs. 18%), and house cleaning (28% vs. 14%) compared to paycheck-to-paycheck consumers with issues paying bills. This suggests these latter services are more discretionary and primarily used by those with greater financial flexibility.

Pricing Dominates Adoption Drivers: For convenience service providers aiming to increase adoption, lowering prices is the most potent factor cited by consumers. Data shows 51% of consumers cite lower prices as an important factor, with 36% ranking it as their most important reason. This emphasis on affordability is more than double the concern shown for the next-highest factor, better service quality. Even better payment options rank behind lower prices in encouraging adoption.

Beyond these points, the report also explores demographic trends within the paycheck-to-paycheck population, noting a sharp increase in this status among Generation Z. It posits that high-income consumers living paycheck to paycheck may be doing so partly due to their spending on convenience services, indicating they value their time highly.

The findings suggest that for businesses offering convenience services, understanding the specific financial pressures on different consumer segments and tailoring pricing strategies — such as subscription models or targeted discounts — may be more effective for growth than solely focusing on service enhancements.