Editor’s note: Sam Killip is VP of customer success at consumer research platform Attest London.
The tough economic climate has had a profound effect on consumer behavior. With shoppers already turning away from household name goods and favoring private brands, it's a tricky time to be a brand marketer.
The inflation figures may relieve weary marketers struggling with constrained budgets and the cost-of-living crisis. However, they shouldn't get too complacent. New research reveals that brand loyalty is at risk, with consumers unhappy over perceived 'greedflation’ at the same time cost savings is at the front and center.
Attest's latest research shows that 88% of Americans are prepared to switch from their favored brands to save money. Further, many brands are being affected by a loss of customer trust, with 80% of consumers believing that brands are using inflation as an excuse to raise prices.
Three-quarters (75%) of consumers think that price rises have been most extreme in the food and beverage sector. This perception is reflected in the statistic that 71% of respondents were most likely to switch grocery brands.
While Americans also cited price rises in the energy and travel sectors as a concern, 40% said they were ready to change clothing and footwear brands to save money. At the other end of the scale, categories such as tobacco and alcohol seem to have escaped the brand loyalty crisis. Steadfast brand loyalty for such “vice” products means that only 16% would make a switch. When it comes to the product that sees the lowest rate of change and highest brand loyalty, financial service providers clocked in at just 14%.
The message for marketers is clear: you must understand and deeply consider consumer sentiment when setting prices. Businesses in some sectors are more at risk than others, but those with the lowest levels of brand loyalty should be especially wary.