Consumer price sensitivity is growing

Discounts and promotions are an increasingly important driver of demand in the current economic climate, with more than half of UK adult consumers using them to trial new brands and products, new research shows.

A report* from the Data & Marketing Association (DMA UK) and Tapestry Research finds that 51% of UK adults are now using promotions in this way, up from 44% in 2022.

Why consumer discounts matters

As more consumers become hooked on discounts and offers, there is a decline in brand loyalty: 63% of consumers claim they often change their mind about what brands/shops/sites to use as a result of deals and offers – an all-time high since the DMA’s research began.

Takeaways 

• Almost half (48%) say they would stop buying from a brand if it stopped offering deals – also an all-time high in the research.
• 61% of consumers feel less loyal to brands now than they did a year ago (up from 41% in 2022); this behaviour is most evident in the ‘essential’ categories (eg. groceries, household goods).
• One in three consumers says they’ve started using cheaper grocery or household product brands alongside the ones they normally use; a further quarter say they’ve completely switched away from their normal brand.
• 81% of consumers stated that they spend time comparing prices before making an important purchase (up from 67% in 2022).

Key quote

“Businesses need a cost-of-living crisis exit strategy whereby they look to reduce the use of price promotions in the marketing mix, and instead refocus on brand and customer service-led reasons to drive loyalty to their brand” – Ian Gibbs, Director of Insight at the Data & Marketing Association.

* Customer Engagement: How to Win Back Customers and (Re)Build Loyalty 2023 

Sourced from DMA