Retailers and Manufacturers are facing two new dynamics in customer buying behavior.
Frugality is here to stay. So is brand jumping for value.
The number of consumers who believe the economy is in a recession has declined significantly since 2011. Yet the majority (58%) still hold a recessionary view, and the number who say they will continue to spend cautiously even if the economy improves has continued to rise. What’s more, nearly 80% of consumers believe the American economy has fundamentally changed and that thriftiness and challenging economic conditions are the new normal. [findings from Deloitte Digital Commerce Survey]
According to a recent survey by the Acquity Group, brands are only one reason away from losing their customers. 40% of consumers surveyed stated they were willing to shift their loyalties for at least one reason. These reasons ranged from enhanced payment security, faster delivery and of course relevant offers and personalized pricing.
So if brand jumping for value and frugality are the new norms, who’s most at risk? Market leading brands of course, especially those who still believe their old value proposition demands a price leadership position.
The writing is on the wall.