More than half of consumers now agree that they often change their mind about what brands or shops to use as a result of deals or offers as they navigate cost of living crisis, a recent report has found, highlighting that brand disloyalty have increased among consumers over the past two years.
According to Data & Marketing Association (DMA)’ latest report ‘How to Win Trust and Loyalty’, 51 percent of consumers now agree that they often change their mind about what brands or shops to use as a result of deals or offers, in comparison to 49 percent of consumers in 2020.
The current cost of living crisis is challenging consumers in ways that are changing their spending habits. While it may be clear that cutting back is a common response by people, the report notes that it is useful for brands to understand where, how much, and why.
About 39 percent of consumers who spend on eating out are cutting back on this versus 18 percent who have stopped spending on this completely. 21 percent of consumers who drink out of home have stopped spending on this already, and 21 percent of consumers who spend on fitness or sport have stopped spending on this.
The report stated that consumers who are planning to cut back will put further pressure on existing loyalty mindsets as they start to change their spending habits. Feelings of disloyalty have increased among consumers over the past two years – 41 percent of consumers claim that they feel less loyal to brands and companies than they did a year ago, in comparison to 34 percent stating this in 2020.
“Our new research reveals consumers are more likely to have cut back their spending than to have stopped spending completely. This places consumers in an interesting mindset where they are prioritising their needs and questioning existing habits and loyalties. Consumers still want to be loyal to the brands they love and they also want to retain the habits they have built up,” said chair of the DMA Customer Engagement Committee, MD at REaD Group Insight.
“However, that may not always be possible in these unprecedented times, so offers and cheap prices are becoming increasingly attractive. For brands, that creates a challenge, to stick or to twist, to keep doing what built up loyal customers or to chase possible switchers with offers.”
Tim Bond, director of insight at the DMA, stated that the UK’s cost of living crisis provides a significant backdrop to any recent changes observed in consumer attitudes to loyalty but change doesn’t have to be a bad thing if brands are responsive and actively seeking opportunities for how they can best serve their customers.
“While we have seen an impact on discretionary spending and shopping habits, this hasn’t stopped all consumers from feeling loyalty – just the most effective ways for brand to earn and retain it,” Bond said.