New study finds measurable shift in consumer shopping behaviors with consumers placing less value on brand loyalty
According to the U.S. Bureau of Labor and Statistics1 cost of living is at a 40-year high, with consumer prices now 8.6% higher this year compared to 2021-the largest 12-month increase since the period ending December 1981. With high inflation, steep gas prices and whisperings of an impending recession, brands and retailers need a pulse on how consumers will be spending their money in order to keep sales figures healthy-particularly ahead of the holiday shopping season that’s only a few months away and likely to start early.
To better understand how consumers’ shopping behaviors are evolving and provide our partners with data to tailor their marketing and sales strategies, we at Blackhawk Network conducted a survey2 of more than 3,200 Americans ages 18+. Respondents were asked about what worries them most about the economy and how they’re addressing those concerns via their shopping behaviors.
The results were resounding -and will greatly impact brands and retailers in the coming months. Nearly three quarters of respondents are worried about gas prices (72%), inflation (71%) and cost of living expenses like groceries (63%). And nearly nine in 10 (89%) have also changed or are considering changing how they shop, including where they make purchases, how they seek out deals, and which brands they buy.
Here are other noteworthy findings:
- Belts are tightening and budgeting is rampant-even among households with higher incomes. Nearly half (46%) of respondents are buying more products on sale, 44% are buying less expensive brands or generic products, 40% are buying more products on promotion (e.g., buy one, get one), and 33% are using more coupons when shopping.
- Brand loyalty is in peril. One quarter of respondents are spending less on the brands they typically buy, 23% report that they’re not making changes to their current brand selections, whereas 22% are planning to buy less from their favorite brands.
- People are prioritizing how to spend their money. Respondents report that there are specific products and services they plan to spend the most on, including groceries and household items. They will be or are planning to buy less clothing, fewer electronics, and spend less on forms of entertainment (e.g., books, toys), and are also planning to cut down on visits to casual restaurants, fast food restaurants and coffee shops.
- People are actively seeking out deals, promotions and other ways to save. In the months to come, nearly 60% of respondents are planning to continue using-or more frequently use-deal-seeking tools. The ones they plan to lean on most often include:
- Coupons (53%)
- Promotions (47%) (example: buy one, get one free)
- Brand and retailer discounts (45%)
- Rebates (31%)
- Cash back offers (24%)
- Loyalty point offers (23%)
- Gas discounts (20%)
- People are moving away from in-store shopping experiences. Nearly 40% of respondents reported that they already have or are going to change the number of places they shop in-store. Gas stations and mass merchants are the stores where consumers are currently shopping in-person the most, but many are planning to begin shopping at budget stores (e.g., “dollar” stores) more in the coming months. Respondents are planning to cut down in-store visits to restaurants, fashion stores, and department stores. Younger respondents (ages 18-29) are most likely to shift to more online shopping compared to 31% of respondents ages 30-60 and 16% of those ages 60+.
- Big plans are getting delayed. As a result of how they feel about the economy, respondents are delaying their plans to travel (43%), make home improvement purchases (47%), and buy cars (57%).
“Money is already tight for many Americans, and people are bracing for ongoing challenges related to inflation and high cost of living,” said Brett Narlinger, head of global commerce at Blackhawk Network. “With so many consumers planning to change their shopping habits in the coming months—or having done so already—brands and retailers need to react swiftly. We’re seeing Americans doing their back-to-school shopping earlier this year, and with the holiday shopping season coming up, it’s likely we’ll see similar buying behavior. The time to change marketing and sales strategies is now. Brands and merchants can expect widespread holiday deal-seeking behaviors very soon as people try to stretch the value for their dollars. Multi-faceted incentives programs that offer reward-based promotions and represent cost savings will be key in preserving the bottom line. Loyalty points, cash back, and other promotions should be included in brands’ and retailers’ marketing mix. For example, merchants can offer gift card incentives to consumers who make certain purchases—which not only drives an initial sale, but also helps drive repeat visits either online, digitally, or in-app for the person buying the gift. Retailers should also consider that with limited budgets, gift cards are likely to be particularly popular gifts since people can buy what they need or treat themselves to something they’ve been sacrificing to save budget, like eating out. Offering promotions for gift card purchases, as well as consumer packaged goods and other products, will create a well-rounded strategy that will help boost revenue, and drive repeat visits and ongoing shopper engagement.”
In addition to impacting Americans’ shopping behaviors, this research study also found that the current state of the economy is impacting the U.S. employment landscape and workplace sentiment. More on that storyline is available here.
1 “TED: The Economics Daily” is a daily report from the U.S. Bureau of Labor and Statistics that reports on key measures of the U.S. economy. The June 14, 2022 report was accessed June 29, 2022.
2“Inflation (and More)” is an internet-based survey conducted by Survey Monkey on behalf of Blackhawk Network in June 2022. The sample size included 3,206 U.S. respondents ages 18+.