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This PSFK report helps brands and retailers understand how they can respond to shoppers’ shifting decision-making processes due to economic uncertainty & unforeseen market disturbances
Inflation, supply chain disruptions, and food price increases are causing consumers to become increasingly price-sensitive and search for value-maximizing shopping strategies. Companies are responding by offering dynamic pricing, loyalty programs, and secondhand options, among other strategies, to retain their current customer base and maximize accessibility. These initiatives coincide with sustainability movements focused on reducing waste and extending the life of products.
In a survey of global shoppers, 86% of UK consumers searched online for better value, and only 23% continued shopping with their preferred brand regardless of price. In the US, 85% of shoppers reported that rising inflation affected their shopping habits, leading them to shop at discount stores and consolidate trips to save costs. Meanwhile, in response to rising prices, 90% of online shoppers surveyed expressed increased interest in getting discounts and earning rewards.
Retailers are responding by revamping loyalty programs and expanding them beyond points to provide significant savings, perks, and rewards. Over 90% of businesses agreed that customer loyalty should be their primary focus in the current economic climate, and 78.6% with existing loyalty programs plan to revamp or make significant changes within the next three years.
In the fashion industry, the secondhand market has grown to triple its size since 2020, with Gen Z showing significant interest in buying and selling secondhand items. In terms of supply chain disruptions, 4 in 5 organizations experienced significant disruptions in 2022, and 50% experienced three or more. Supply chain leaders predict that food, gas, and computer chips are most at risk of impact in 2023.
By understanding and responding to these changing dynamics, companies can successfully navigate the economic climate, build strong customer relationships, and position themselves for long-term success.