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Consumers seek value over price as brand loyalty dips

| Supplier news

By Nompilo Goba – Business Live

Shoppers explore many outlets seeking quality at reasonable prices, survey shows

SA retail brands are experiencing a decline in consumer loyalty as cash-strapped shoppers become discerning and value driven in their purchase patterns.

According to a grocery shopper survey conducted by Trade Intelligence in June, consumers have turned to exploring multiple outlets seeking quality at reasonable prices rather than the cheapest options.

The organisation said the Covid-19 pandemic and the resulting supply chain disruptions played a big role in loosening the traditional bonds of loyalty between shoppers and their preferred brands and retailers.

“In a challenging economic environment, shoppers are now switching brands and retailers based on where they perceive value — whether in brick-and-mortar stores or the rapidly growing online space,” it said.

The definition of value is complex and varies among consumers. According to Nicola Allen, senior retail analyst at Trade Intelligence, the concept of value has evolved. She said shoppers had moved from associating value with price to determining it based on quality.

 “When we ask shoppers what ‘value’ means to them, the answer is not ‘cheapest prices’ or even ‘special offers and promotions’,” Allen said. “It is ‘good quality at a reasonable price’. This reinforces the concept that price can never be fully divorced from quality.”

This expression of value has far-reaching implications for retailers and brands. With traditional loyalties waning, shoppers are now relying on diverse information sources, from word of mouth to social media platforms. The report found that while 36% of shoppers trust that retailers are doing their best to deliver value, and 24% have strong trust in retailers, 62% of the shoppers frequent four or more grocery stores.

“While they say that loyalty programmes make them more loyal to a store, their behaviour indicates otherwise. To complicate things further, a new generation is entering the grocery shopping sector — Gen Z. These 27-and-unders are more educated than older cohorts, more demanding, and more reliant on technology and digital channels and diverse information sources, from word of mouth to TikTok,” said Trade Intelligence.

Allen emphasised the importance of tailored research suggesting that brands study their consumers and delve into their specific needs and preferences. Whether it is understanding the impact of pricing strategies or the dynamics of shopper loyalty, brands must invest in research that goes beyond broad trends to uncover actionable insights. 

“In a fragmented shopper landscape, there’s no longer a one-size-fits-all approach. That said, it is essential that research solutions for individual brands are underpinned by a solid base of industry insights and intelligence.”

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