New Research Finds Majority of Consumers in the UK, Germany, and France Believe Economy Won’t Improve in 2023; Shoppers Reducing Spend in Half of Retail Categories
Study reveals consumers will make purchasing decisions based on emotional connection and price relief through exclusive offers due to their community member status
SheerID, the global leader in identity marketing, today announced the findings of a survey designed to understand how the current economy is impacting consumer’s spending habits. The survey also sought to understand how shoppers felt about the economic downturn, how their purchasing behavior has changed, and what brands can do to engage, acquire, and retain them. This new data comes from a survey of more than 3,500 consumers in the United Kingdom (UK), Germany, and France that was conducted by market research software provider, Centiment in May of 2023.
The psychological and financial impact of economic uncertainty
The survey found that more than 80% of consumers in the UK, France, and Germany expect the current economic downturn to last more than 12 months. And in response to higher prices, higher interest rates, and their bleak outlook on the financial future, more than 90% of shoppers are reducing or changing their spending habits. Specifically, they are spending less (54%), eating out less (49%), purchasing fewer non-essential items (51%), and shopping with less expensive brands (44%).
The majority of consumers also said they were spending less in more than half of the categories they were asked about – spending less on software (55%), travel (53%), furniture (58%), apparel, footwear, and accessories (54%), gaming (58%), electronics (56%), take-out/food delivery (64%), and craft/home improvement supplies (58%).
“Providing consumers with an exclusive offer based on the group status that they are proud of is a tried and true strategy for meeting both their emotional and financial needs. And when brands do that, they attract and retain loyal customers in good times and bad.”
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What consumers want from retailers
Survey respondents revealed that they are inspired to purchase from retailers who create an emotional connection with them while also providing price relief.
When asked what would motivate them to try a new brand, 63% indicated “an exclusive discount for my community” is the preferred option. This was by far the most popular tactic, beating out a general discount (53%), better customer service (36%), access to buy-now-pay-later financing (24%), the opportunity to buy online and pickup in-store (26%) and even personalized offers based on interests collected from their website activity (19%).
Needs of consumers vary by affinity group
All consumers like discounts, but the survey revealed that consumers who belong to communities they strongly identify with found exclusive offers for their group more compelling – 89% of students, 81% of healthcare workers, and 73% of teachers said receiving a special discount for their communities would motivate them to try a new brand.
Brand generosity inspires emotional engagement and customer acquisition
More than 60% of all the consumer communities surveyed said they feel more emotionally connected to brands that give them an exclusive offer.
Consumers are loyal to brands that reward them for the groups they belong to
Survey results indicate that exclusive offers plant the seed for tremendous brand loyalty. More than 70% of consumer communities – including 79% of teachers, 76% of healthcare workers, and 75% of students – said they would likely join a brand’s loyalty program to receive an exclusive offer.
That seed of loyalty grows into a deep commitment to the brand. Seven in ten consumers belonging to identity-based communities said they are more loyal to brands that give them an exclusive offer. And exclusive offers turn consumer communities into brand advocates at an even higher rate. More than 9 in 10 said they would share an exclusive offer with others who were eligible for it.
“There’s no question that the down economy has stoked consumer pessimism and chilled spending, but these findings give brands a clear path to engage shoppers,” stated Jake Weatherly, CEO of SheerID. “Providing consumers with an exclusive offer based on the group status that they are proud of is a tried and true strategy for meeting both their emotional and financial needs. And when brands do that, they attract and retain loyal customers in good times and bad.”
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