Self-Restraint Is the New Splurge: What Today’s Shoppers Are Really Spending On

Why shifting consumer habits matter—and how to adjust your product strategy in Q1

Remember when January was all about new planners, new goals… and new leggings? Not this year.

According to a recent McKinsey & Company study, self-restraint has officially replaced splurging—and shoppers are cutting back on non-essentials with laser precision.

And no surprise: consumer sentiment is the lowest it’s been in over a decade.People are feeling the pressure of inflation and rising prices, and they’re reacting by spending less, especially on things they don’t consider absolutely necessary.

Let’s Talk Numbers:

Out of 4,000 consumers surveyed:

• 1 in 3 said they plan to cut back on apparel

• Spending on furniture, home décor, electronics, accessories, and jewelry is also taking a hit

• Top reasons? Inflation, rising prices, and overall economic anxiety

Even holiday splurges—which usually carry over into January—have dropped off fast this year. Consumers are tightening their wallets, and fast.

Why This Matters for Handmade Sellers

If you sell in a category that falls into the discretionary zone (think candles, jewelry, skincare, home décor, or anything non-essential), this data is a wake-up call—not a death sentence.

Here’s the silver lining:When people do spend in a tight economy, they want:

• More meaning

• More quality

• More value

• More emotional connection
  

That’s your superpower as a handmade business.

Rethink the Offer, Not the Product

If your usual Q1 sales strategy is feeling off—you're not imagining it. Now is the time to:

• Shift your positioning: Highlight emotional benefits over features. (E.g., "This candle creates calm in chaotic times.")

• Offer smaller entry points: Think mini sizes, kits, or bundles under $25.

• Focus on retention: Pour love into your email list. Keep current customers engaged rather than chasing cold traffic.

• Introduce value-based pricing: Don’t race to the bottom. Instead, explain why your product is worth it—and make it easy to say yes.

Semi-Essentials Are Still Holding Strong

According to the McKinsey report, categories like personal care, groceries, and household supplies haven’t seen the same level of pullback. In fact, some of them are holding steady or even growing slightly.

So if your product overlaps with wellness, ritual, or care, this is the time to double down on that positioning.

Example: Instead of “body butter for dry skin,” try “a soothing balm for stressed-out winter skin.”

It’s a subtle shift, but it speaks to what your customer is feeling—and what they actually want.

Caution Doesn’t Mean Inaction

Yes, shoppers are cautious. But that doesn’t mean they’ve stopped spending entirely.It means they’re making more intentional choices—and prioritizing purchases that feel personal, purposeful, or pampering.

In a season of self-restraint, your brand’s heart, mission, and message matter more than ever.

Keep showing up with value, listening to your customers, and refining your messaging.Recessions don’t stop all spending—they just shift where it happens.

Let’s make sure it’s happening with you.

Want to read the full McKinsey report?Here’s the link to dig deeper.