The cost of doing business: one in five Brits “can’t afford to be loyal”

New Data: Over half of shoppers have ditched their favourite brands due to the cost of living crisis

Over half (56%) of Brits 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”. That’s according to the second annual Emarsys Customer Loyalty Index released today.

The research, which includes data from over 2,000 UK shoppers, examines how different attributes — age, gender, geography, geopolitics, and ethics — affect loyalty in an economic environment suffering from high inflation, fiscal uncertainty, and unprecedented political instability. Of those surveyed, 64% have changed their attitude towards loyalty over the last 12 months.

 

Price trumps loyalty

When it comes to dropping their favourite brands, the #1 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%).

Brits stay loyal to UK and Ukraine

Despite the financial pressures facing many consumers on the home front, UK shoppers are remaining loyal to certain supermarkets, brands and suppliers.

57% of UK respondents say 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 more than half (57%) of us are less likely to buy Russian-made products.

How can retailers keep loyal customers this Christmas?

In an analysis of what drives loyalty, the #1 factor cited was personalised discounts, incentives, and rewards delivered in a bespoke way. These types of bespoke deals are important to 71% of customers.

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.

Some groups are more price-sensitive than others

Across the board, 56% of Brits say 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 say 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 interesting 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.

Supporting quotes

 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.”

 

About the Emarsys Customer Loyalty Index

The Emarsys Customer Loyalty Index in its second year, is based on a survey of 2,000 nationally representative respondents in the UK between August 25th and August 30th, 2022. The survey was conducted by Opinion Matters, which abides by and employs members of the Market Research Society, based on the ESOMAR principles. More information about the Customer Loyalty Index can be found at https://emarsys.com/learn/blog/emarsys-customer-loyalty-index-2022-united-kingdom/

Emarsys empowers brands around the world to deliver truly personalised omnichannel experiences that accelerate predictable and profitable outcomes.

Through innovation, Emarsys brings power to the marketer – with features announced including Mobile Wallet which allows marketers to launch campaigns using wallet passes, Conversation Channels, which allows marketers to engage customers on preferred chat channels like WhatsApp or Facebook Messenger and Enhanced CDP Integration, which allows marketers to and synchronize consumer identity.

 

About Editor 2507 Articles
Lisa Baker is the Editor of International Business News. As the Owner of Need to See IT Publishing, Lisa is an experienced business and technology journalist and publisher.