Consumers prioritize prices over brand loyalty, seeking more value for money

From Yahoo Finance: 2025-03-26 16:01:00

Consumers are showing less loyalty to brands as economic pressures and tariff uncertainty lead to reassessment of shopping choices. EY Future Consumer Index surveyed 20,000 consumers across 26 countries, revealing price sensitivity as the top purchase consideration for 4 in 5 consumers globally and rising living costs concerns.

EY survey findings indicate consumers expect more from brands as the economy causes anxiety and prices rise. The Conference Board also found consumer expectations hit a 12-year low in March, impacting purchase behavior changes in response to price increases.

Consumers are moving away from brand names, with one-third no longer considering brands in purchase decisions. About two-thirds believe private label items are as good as branded products, and over half only buy branded products on sale. Dollar Tree reported increased store traffic in the inflationary environment on an earnings call.

While consumers prioritize prices over brand loyalty, two-thirds still value brands. Expectations for value, trust, and relevance are higher. Half of customers who switched brands would return for better quality or performance, and one-third for better value.

As prices rise, consumers seek more value for their money. Customer experience can be a differentiator in gaining market share during inflationary periods, according to Mario Matulich, president of Customer Management Practice. Prioritizing CX in the value proposition can help organizations succeed.

Read more: As inflation looms, brands have to work harder for loyalty