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Report: Brand Loyalty at Stake, as More Consumers Prioritize Affordability

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With inflation on the rise, multi-location brands have to rethink the way they connect with consumers. This is especially true as price concerns lead more consumers to consider alternative brands and cut back on discretionary spending at places like restaurants, gyms, and salons. 

According to the Q2 Consumer Trends Report released by Jungle Scout, the desire to save money is driving brand, product, and e-commerce preferences more than any other factor. 

Brand loyalty is increasingly dictated by affordability, with almost half of consumers (48%) saying their favorite brand’s consistently lower prices are a key reason for shopping with them. The percentage of consumers who would switch from their favorite brand if a new brand were more affordable increased by 12% in the last quarter.

“With inflation on the rise, it’s not surprising; however, something that stood out to me is the shift in prioritizing affordability. More than anything, consumers want to save money, and this is impacting brand, product, and e-commerce preferences more than any other factor,” says Jungle Scout CEO Greg Mercer.

While inflation affects people of all ages, Mercer points out that Jungle Scout’s report shows generational differences in how consumers save money. For example, researchers found that millennials are less likely to stop buying their favorite brands as a way to cut costs than boomers are. Boomers are also more likely to wait for sales before making a purchase.

More than half of consumers in Jungle Scout’s survey said they read social media comments to learn what’s being said about a brand, and ​​35% have purchased a product after watching a social media brand’s livestream

“Our research show that social media currently plays a big role in consumer purchase decisions. Social media is a way for brands to connect with different audiences in a relatable and direct manner,” Mercer says. “Brands should be mindful of using the right channels to connect with their audiences in order to optimize their online presence. While Instagram and TikTok have dominated our attention in recent years, brands shouldn’t forget about other major platforms like YouTube and Facebook that are still widely trusted by consumers to find and purchase products.”

Forty-six percent of consumers said they consider being “followed” around the internet by ads a “helpful reminder,” while 32% are “creeped out” by the practice.

With inflation impacting nearly 77% of consumers, and many opting to buy less expensive products to save money, Mercer says brands today are facing a big challenge. The brands that succeed in this market will be those that take the changing consumer landscape into account and find ways to make emotional and financial connections with their consumers through targeted marketing and advertising campaigns. 

“Not only does this appeal to the values of consumers, but it also differentiates your brand from the competition,” Mercer says.

Perhaps unsurprisingly, Jungle Scout found that the most popular retail store in Q2 2022 was Walmart. While Amazon still dominates the e-commerce space, Jungle Scout found that and social media channels grew in popularity among online shoppers in the last quarter. 

Forty-eight percent of consumers said they expect their online spending to stay the same in the coming months, while nearly one-in-five said they expect it to decrease. 

“I hope this data allows retailers to better understand consumer behavior and the trends shaping the retail industry. This understanding allows retailers to stay focused on their target market and better predict the needs and wants of their consumers as the world around them changes,” Mercer says. “By having this understanding, retailers can create more informed, data-driven strategies that impact every area of their business, from advertising to messaging and pricing.”

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.