Over half (56%) of British consumers have switched from a favourite brand they were loyal to due to increased inflation and the cost of living crisis, while one in five shoppers (19%) agree that they can “no longer afford to be loyal”.
This is according to the second annual Emarsys Customer Loyalty Index, which examines how different attributes – age, gender, geography, geopolitics, and ethics – are affecting brand loyalty amidst the tough economic environment. Of the 2,000 UK shoppers surveyed, 64% have changed their attitude towards loyalty over the last 12 months.
When it comes to dropping their favourite brands, the number reason cited by shoppers was price increases, with 56% stating this as their reason for abandoning their loyalty to a shop or brand.
A difficult shopping experience followed close behind with 55%, just ahead of selling poor quality products (47%).
Despite the financial pressures facing many consumers on the home front, UK shoppers appear to be remaining loyal to certain supermarkets, brands and suppliers. 57% of UK respondents said they are staying loyal to UK-made products rather than those produced abroad. 31% of Brits are also prioritising products from Ukraine.
On the flip side, the Loyalty Index indicates that UK shoppers will actively avoid products produced in China or Russia; 42% of consumers are less likely to buy items made in China, while 57% are less likely to purchase Russian-made products.
In an analysis of what drives loyalty, Emarsys found that the leading factor cited was personalised discounts, incentives, and rewards delivered in a bespoke way. These types of bespoke deals are important to 71% of consumers.
The study noted that these numbers suggest that customer loyalty is more than a simple correlation with price – customers are happy to pay when deals are tailored to them and their current financial needs.
Across the board, 56% of those surveyed said inflation has impacted their loyalty to a brand, with many moving away from branded items in order to save money. But when this data is parsed along income, gender, and political lines, a different picture emerges.
From an economic standpoint, loyalty is obviously easier to demonstrate for those that feel less financial pressure. 71% of those in households with an income of £120,000 or more said they consider themselves ‘loyal’ to a certain type of retailer, brand, or store — compared to less than half (44%) of respondents in households with an income of less than £8,000.
Along gender lines, there are some splits between the loyalty of men and women when purchasing:
| Industry Sector | Male | Female |
| Alcoholic drinks | 20% | 15% |
| Beauty and skincare | 17% | 40% |
| Clothing and fashion | 45% | 65% |
| Food | 52% | 51% |
| Food delivery | 15% | 18% |
| Furniture/homeware | 15% | 17% |
| Technology | 30% | 14% |
Despite the variation in these figures, there isn’t much ‘conscious’ intent to remain loyal to many of these industries. 33% of consumers would look to remain loyal to their food brands if a recession struck, but every other industry was less than 10%; 28% specifically stated that they wouldn’t look to remain loyal to any industry.
Mark Choueke, retail expert and author, commented: “In order to drive meaningful customer loyalty, customer-centricity is no longer enough. Brands and marketers must now aim for customer obsession. Marketers have to really get to know each customer and internalise their habits and preferences through all the provided data.
“That level of understanding includes knowing when, where and how individual consumers like to shop, and being able to personalise the routes they take on their customer journey. Shoppers want retailers to travel with them as they scour both physical and online stores, all the time wrapping the experience around them.
“Tech is key in delivering this sort of capability. Emarsys’ Loyalty Index provides a framework within which we can understand the different motivations for customer loyalty, better contextualising the consumer data available to marketers, and help them to identify the best possible activities and campaigns for their unique audiences.”
NAM Implications:
- Survival mode means survival mode…
- Hopefully, not too many switchers begin to feel that branding does not ‘deserve’ the brand premium.
- Perhaps brands now need to start preparing to win back those that can afford to return?
