Consumers are willing to try different products, services amid inflation
Inflation’s impact is weighing heavily on brand loyalty for American consumers, with 8 in 10 (88%) saying they are now willing to try different products and services due to price pressures, according to new research from Attest.
The survey finds that consumers are nearly neck-and-neck when asked for the number one reason why they would stop buying a brand’s product/service. A “negative experience” with a brand (33%) is only just ahead of price increases (32%) as the top reason. This is followed by bad customer service at 18%.
Shoppers have the least loyalty toward grocery brands: Food and beverage brands are cited as the products consumers are most likely to switch to save money (71%), followed by clothing/shoes (40%). By contrast, out of all categories, Americans are least likely to want to change their financial services provider (14%) to save some dollars, indicating a high level of trust being placed with these providers by consumers. This is followed by vice products (alcohol, tobacco) and furniture/decor brands (both at 16%).
[Read more: FMI report: Fewer shoppers cutting back on items purchased, despite higher prices]
A majority think brands are price gouging due to inflation: The vast majority of shoppers (at 80%) feel that brands are involved in “greedflation” (using inflation as an excuse to hike prices). Of this majority, 58% believe “more needs to be done” to protect consumers and stop brands from benefiting from this practice.
Consumers feel food brands have lifted prices the most: When quizzed on what products have experienced the most rapid rises in their opinion, groceries (at 75%) were far ahead of all other product types. Energy ranked second (37%), followed by travel (27%).
The research identifies another factor alongside inflation diminishing brand loyalty: public controversy. In this environment, brands are under even more pressure to avoid PR, advertising and product disasters. But, if a blunder does arise, the research also delves into consumers’ views on companies caught up in high-profile controversies and how they can set the record straight:
- Consumers value transparency the most during a controversy: A majority of Americans want brands to fess up when they’ve messed up; 55% want a brand involved in a high-profile controversy to provide full transparency and steps on how they will fix it; 42% will be happy with the issuance of a public apology.
[Read more: Store brands shine as consumer wallets tighten]
- Other remedies favored by people include removing the person responsible (32%), offering a discount/refund (29%) and providing services to lodge complaints (18%).
- Most people are willing to wait before reacting: The most likely response from Americans is to give a brand time to issue a public statement before making up their mind on a response (35%).
- By contrast, however, 26% are much less patient and will boycott/stop buying a brand’s products and services “immediately” due to a controversy.
- While social media plays a key role for 15% of consumers, who will either unfollow a brand or publish public posts disapproving of a company involved in a controversy.
- Americans are most concerned by racism: An accusation of racism when a brand is involved in a controversy is the top issue that concerns the public (at 42%).
- This is followed by accusations of discrimination (based on people with disabilities, religion and sexual orientation) and poor treatment of employees (both at 35%). The other top issues include the treatment of animals (32%), while a combined 27% of Americans are concerned with brands involved in political controversies:
- 15% express concern if a brand was accused of left-wing, socially liberal politics.
- While 12% would feel the same way regarding accusations of right-wing, socially conservative politics.
- 16% say that “greenwashing” would worry them the most, while ageism is the least cited as a concerning issue for the public (at 8%).
The total sample size for this research was 2,000 nationally representative working-age consumers based in the United States. The survey concluded on Feb. 15, 2023.