Exploring The Forces Of A Value-Driven Shopping Paradigm

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

Executive Summary

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.

What You’ll Learn From This Report

• How the current economic climate is affecting consumer behavior, and why finding affordable options is now a top priority for many.
• What tools and strategies companies are using to help guide consumers towards the best alternatives, such as dynamic pricing and smart shopping companions.
• How consumers are benefiting from the value of their data, and how this is changing the way companies approach data collection and usage.
• How subscription services and rental models are changing the previous conceptions of ownership, offering more flexible and adaptable purchase options for consumers.
• How waste reduction and sustainable practices are working in tandem with the aim to maximize value for consumers, driving innovative product lifecycle solutions and circular economy initiatives.
• How strategic alliances and bundled perks are multiplying the value consumers receive, and how brands are leveraging these partnerships to differentiate themselves from competitors and build customer loyalty.