The cost-of-living crisis has affected consumer loyalty to the degree that almost half (48%) of consumers say they are ready to ‘abandon’ their favourite brand if it stopped offering deals.
The financial crisis has led consumers to become increasingly price-sensitive over recent years, with a huge surge in the past year, reveals the recent research from the Data & Marketing Association (DMA UK).
Discounts and promotions have become an increasingly important driver of consumer demand in the current challenging economic climate, with 51% of UK adults using offers to trial new brands and products (up from 44%).
However, this reliance on bargain-hunting also means almost two-thirds (63%) of consumers say they often change their mind about which brands, shops and sites to use because of the number of deals and offers available – an all-time high since the DMA’s research began.
The figures also reveal that brand loyalty has seen a sharp decline, with 61% of consumers feeling less loyal to brands now than they did a year ago (an increase from 41% in 2022).
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In addition, almost half (48%) of those surveyed said they would even stop buying from a brand if it stopped offering deals, suggesting price sensitivity is increasingly impacting brand loyalty.
Meanwhile a further one in three consumers have said they’ve started using cheaper grocery or household product brands alongside the ones they normally use, while a quarter say they’ve completely switched away from their normal brand.
“The use of price promotions is a vital tool in helping businesses hit their short-term KPIs,” said DMA UK director of insight Ian Gibbs.
“However, their over-use will result in consumers becoming hooked on deals and offers, displaying the higher levels of price sensitivity (or price elasticity) that ultimately eat into profit margins.
“Competition for brand loyalty is fiercer than ever,” he said, adding:
“Businesses need a cost-of-living crisis exit strategy whereby they look to reduce the use of price promotions in the marketing mix, and instead refocus on brand and customer service-led reasons to drive loyalty to their brand”
