The cost of living crisis has had a dramatic impact on consumer spending – with brands needing to focus on value and the longevity of their products to win customer loyalty.
This was one of the key findings from a new research report by Gekko. The survey of 2,165 British respondents carried out by YouGov in August commissioned by Gekko, revealed that two thirds have cut back spending on ‘considered purchases’.
Meanwhile, 43 per cent of people have cut back on spending on ‘essential household items’ due to the increased cost of living.
The categories hit hardest by a cut back in spending are consumer electronics and homeware and home furnishings, with 61 per cent of consumers of these goods reducing spending.
In today’s environment, the number one factor making people consider a purchase in the consumer technology space is that something is within budget, 69 per cent, said Gekko, and durability/being fit for purpose was next, at 52 per cent.
Of those cutting back on essential household items, one in three have cut spending by more than 15 per cent, according to Gekko’s research. And home owners are the most affected compared to renters.
Consumers looking to switch brands
Brand loyalty has plummeted in the current climate. 60 per cent of people would switch brands for essential items and 48 per cent revealed they are more likely to switch non-essential considered purchase brands.
Commenting on the findings, Dan Todaro, Managing Director of Gekko, said: “The results highlight the dramatic but also the uneven impact of this cost of living crisis. There is certainly no generic strategy for brands wanting to remain relevant in the current economic climate. These huge variations in choice are clearly based on income level, age, gender and location. No longer is desire beating need when making choices.”
He continued: “While large numbers of people are being seen to be cutting spending on considered purchases, it is now implied that brands should focus on price and durability as the two key factors driving buying decisions. Ephemeral qualities like brand values seem less important in today’s climate.
“However, having the right tone and audience-centric approach may assist brands in weathering the turbulent times predicted ahead.”