Consumers Battling Cost of Living Crisis Are Choosing Affordability Over Brand Loyalty
Affordability is the leading concern for 35 percent of global consumers today, according to new survey data from EY, increasing by 10 percent since October 2022.
EY’s Future Consumer Index surveyed more than 21,000 consumers across 27 countries to understand consumer sentiment and behaviors with 94 percent reporting that rising living costs are a concern. The concern is presented in shifts in purchasing habits and many say they are losing trust in retail and consumer product companies.
More from WWD
Inside the JW Anderson and SSENSE Bumper Hike Sneaker Launch Party
A majority of consumers, 92 percent, said they are concerned with their country’s economy and 39 percent said they expect their country’s economy to get worse over the next six months. As they shop, 79 percent of respondents said they feel food prices have increased over the last three to four months and 74 percent have noticed some brands have reduced their packaging sizes without price changes.
As consumers cope, EY found that they are changing purchase habits and the way they interact with brands. Instead of replacing possessions, 67 percent of respondents said they would prefer to repair items, challenging the consumer desire to always have the latest model.
Notably, 62 percent reported they do not feel the need to keep up with the latest fashion trends. While 55 percent of consumers say brands are no longer important, half said they would now consider private labels for clothing, shoes and accessories.
“Consumers are remaining frugal and resilient to cope with cost-of-living pressures, leaving them no choice but to draw on lessons learned from the global pandemic,” said Kristina Rogers, EY global consumer leader. “They are seeing the value they receive from brands diminish due to price increases and shrinkflation. Consumers are responding by switching away from brands, reducing their list of essentials and canceling subscriptions to maximize their budgets. With trust in retailers and consumer products businesses eroding across the board, businesses must be prepared to accept that decisions they make now could have long-term implications on consumer loyalty and brands will need to double down on innovation and marketing efforts to compete.”
EY’s survey found that these new consumer behaviors are also impacting the way people are considering technology. When they are shopping, 66 percent of respondents said they are willing to share their data in exchange for cheaper alternatives.
“Consumer attitudes toward technology are evolving just as rapidly as the technology itself, as people look for a fair exchange of value,” said Rogers, who acknowledged consumers growing use of digital technology to make life easier, save money, save time, work from home and reduce environmental impacts. “Businesses must foster a relationship with their customers around technology based on trust, respect and value. Failure to do so will damage relationships in the long term.”
Best of WWD
San Francisco Authorities Seize Nearly $2 Million in Suspected Stolen Merchandise