Stick or twist? Four in 10 consumers less loyal to brands than a year ago

Just over four in 10 consumers are reporting that they feel less loyal to brands and companies than they did a year ago.

The figure, part of new research released from the Data & Marketing Association (DMA), is an uptick on the 34% reporting the same sentiment when asked in 2020, as a consequence of changing mindsets over spending habits amid the cost of living crisis.

The DMA report ‘How to Win Trust and Loyalty’ found that just over half of consumers agree that exposure to deals and offers means they often change their mind about what brands or shops to use, a slight uptick from 49% in 2020.

However, there has been a rise in the mindset of what the DMA terms ‘Habitual Loyals’ – those that cite more loyalty towards everyday items over more expensive or luxury goods – with this rising to 21% compared to 17% in 2020. ‘Situational Loyals’ – those that display more loyalty towards expensive items – have fallen to 18% from 21% in 2020, while ‘Active Disloyals’ have dipped slightly to 9% from 11%.

Tim Bond, Director of Insights at the DMA, said: “The UK’s cost of living crisis provides a significant backdrop to any recent changes observed in consumer attitudes to loyalty. But change doesn’t have to be a bad thing if brands are responsive and actively seeking opportunities for how they can best serve their customers.

“While we have seen an impact on discretionary spending and shopping habits, this hasn't stopped all consumers from feeling loyalty – just the most effective ways for brands to earn and retain it.”

The cost of living cuts – what, where, and how much?

Almost four in 10 consumers who spend on eating out are cutting back, while 18% have stopped spending on dining out completely. One-fifth (21%) who drink out of home have already stopped doing so, with the same proportion of those spending on fitness and sport cutting it out completely from their outgoings.

Media subscriptions are more protected, with 42% of consumers saying they expect no change to their current spend, with 38% saying the same about holidays.

Scott Logie, Chair of the DMA Customer Engagement Committee, MD at REaD Group Insight, said: “Our new research reveals consumers are more likely to have cut back their spending than to have stopped spending completely. This places consumers in an interesting mindset where they are prioritising their needs and questioning existing habits and loyalties.

“Consumers still want to be loyal to the brands they love and they also want to retain the habits they have built up. However, that may not always be possible in these unprecedented times, so offers and cheap prices are becoming increasingly attractive. For brands, that creates a challenge, to stick or to twist, to keep doing what builds up loyal customers or to chase possible switchers with offers.”