Remember the days when our biggest decision was choosing between Thin Mints and Samoas?
Even Girl Scout cookies aren’t immune to the current inflation tug-o-war. According to a recent NPR article, many Girl Scout regional councils have been pushed to increase the price of these iconic cookies due to the rising costs of ingredients and transportation.
This is a small, yet telling, indicator of how inflation is touching the everyday aspects of our lives, making us all rethink our spending habits. It’s not just about a few cents added to our favorite cookies — it’s about the broader ripple effect on consumer behavior, brand preferences and ultimately, brand loyalty.
We’re all feeling it in one way or another, from the Tagalongs to our weekly grocery haul — and brands and retailers are being affected along the way.
So, let’s dive into the intricacies of this inflation equation and explore how these economic tides are reshaping consumer behavior and brand loyalty.
The Pulse of Consumer Expenditure
In a climate where inflation rates consistently eclipse the Federal Reserve’s benchmarks, the U.S. consumer mindset is, unsurprisingly, in flux.
A closer look at spending patterns reveals a population in varying stages of money-saving modes:
- 24% are spending more than half a year ago.
- 33% maintain their spending levels.
- 27% are cutting back.
But marketers shouldn’t only focus on how much consumers spend — we also need to take into account where they see value.
Convenience and cost are emerging as prime concerns, overshadowing shipping, quality and customer service. A notable 60% of consumers mention that their grocery spending now takes up a more significant chunk of their income than in 2022.
Navigating the Tides of Inflation
Here are a few important points to remember about how inflation is shifting consumer sentiment.
Hunting for Value
With shoppers increasingly turning to stores offering lower prices, sales at value retailers surged by 8% YoY in March 2023. It’s clear that a deal still appeals since half of the shoppers are open to stocking up when their favorite brands are on sale.
The Bulk Buying Phenomenon
The logic is simple – larger package sizes often mean better value for consumers’ money. This sentiment resonates with a quarter of Americans who now opt for larger-sized products with longer shelf lives.
The Price Is Right
Four out of five consumers have made it clear: If another brand or store offers a better price, they’re willing to switch. In fact, 59% admit they’d shop at an unexpected location if the price was right.
Loyalty’s New Look
As cost becomes a top priority, brand loyalty takes a hit. 88% of American adults would consider swapping their preferred brands to save a few bucks.
Reassessing Brand Loyalty
While cost is undeniably a significant factor, it’s not the only thing on consumers’ minds.
When asked about brand loyalty, many shoppers equated it to purchasing a brand “most often” while remaining open to other options. Categories such as fresh produce and shelf-stable items are seeing more consumers gravitate towards store brands. And if a preferred brand is out of stock? 40% are ready to jump ship to a competitor.
But not all is gloomy for brand purists — some categories like candy and pet food still command significant brand loyalty.
Generational Views on Spending and Loyalty
Brand loyalty in the age of inflation varies by generation. Here’s how.
Gen Z
This environmentally-conscious generation values sustainability over brand names. And while they might be digital natives, half of them still prefer brick-and-mortar stores for shopping.
Millennials
Socially aware, this group chooses brands that echo their values. Also, considering a significant segment of parents in the U.S. belong to this generation, understanding their priorities is essential for marketers.
Gen X
This generation values trust and loyalty. A significant 82% wouldn’t mind paying full price for a product they desire.
Baby Boomers
This group’s shopping behavior leans traditional. Most often, they learn about new products through cable television ads. On a fun note, they’re upping their spending on party supplies, signaling more significant celebrations for birthdays and golden anniversaries.
Adapting to the New Consumer Landscape
Just as we’ve all had to grapple with the bittersweet reality of pricier Thin Mints, the world of brand loyalty is undergoing its own transformation. Inflation might be leaving a dent in our wallets, but there’s still an opportunity for brands to sweeten the deal and create lasting connections.
In a world where consumer behavior is as dynamic as the market, the key for brands is to remain adaptable, listen to their audience — and continue to offer genuine value.
Want more resources about future trends to guide your marketing strategies? Dive into:
- The top 20 B2C digital marketing trends for 2024.
- What the future of retail media networks looks like.
- Some leading trends brands and retailers can expect from now to 2028.
Larissa Franklin is a strategic insights analyst at Goodway Group based in Phoenix, Ariz. Previously, she served in a few other roles at Goodway, including as a media product coordinator and a research specialist. Prior to joining Goodway, Larissa worked in account management, project management and account executive positions at organizations such as Getty Images and Sq1. She brings expertise in the inner workings of the creation of commercial media as well as both digital and traditional advertising and is a graduate of Columbia College Chicago, where she earned her BFA in Film & Audio.