Brand switching and saving hacks: How shoppers adapt to high prices on their own terms

A variety of economic factors put pressure on consumers’ budgets in 2023. In addition to ongoing inflation, the end of government relief programs enacted during the pandemic constrained purchasing power even further last year. But shoppers stepped up to meet these challenges head on. 

The 84.51° Consumer Digest 2023 Year in Review report reveals how shoppers rose to the occasion and responded to high prices and assistance cuts with flexibility, creativity and resilience. Understanding these new customer strategies and behaviors can help CPG brands better meet shopper needs and expectations for an improved customer experience that builds stronger relationships and brand loyalty. 

Searching for deals and switching brands

Shoppers employed many strategies to combat inflation and help make ends meet. Over the course of the year, the majority of shoppers (yearly average of 67%) responded to inflation and high prices by looking for sales, deals and coupons more often. Roughly half of shoppers fought inflation by cutting back on non-essential items like candy and snacks, and switching to a lower cost brand more often. And a smaller percentage of customers said they also purchased fewer items on their grocery trips and cooked their own meals more often. 

Shoppers also adopted new savings “hacks” to stretch their overall dollar on food and household items in the face of inflation. From utilizing more store coupons and loyalty programs to buying in bulk and purchasing store brands over premium brands, they got creative to help save wherever they could.  

Brand switching in response to SNAP reductions

March of 2023 saw the end of the Emergency Allotment payments provided by the U.S. government’s Supplemental Nutrition Assistance Program (SNAP) during the pandemic. Of the households that were receiving these extra allotments, 62% said the end of that benefit caused a significant impact to their overall household budget.   

This loss of income prompted customers to make many adjustments to their shopping habits to make up the difference. Half of these shoppers (51%) said they spent less on groceries and cut back on other expenses to afford groceries. Brand switching behaviors included buying lower quality products (45%) and buying more store name brands (32%). Some of these households said they went beyond changing their buying behaviors to other actions including using food banks more often (34%) and skipping meals entirely (30%). 

Adjusting spending for student loan repayments

Another factor impacting spending for many consumers last year was the end of the government’s student loan forbearance period. According to Credit.com, 13% of the U.S. population has some form of student loan debt. Our research found that almost half (49%) of respondents with student loan debt are extremely concerned about maintaining their monthly budget with the resumption of these payments. To make room, they said they’re more likely to cut back spending in categories including dining out, food delivery services, outside of the home entertainment (e.g., concerts), travel and clothing. Categories they’re less likely to cut back on include groceries, at-home entertainment, cleaning and personal care essentials, and transportation.  

From seeking discounts to switching brands, shoppers showed flexibility and resolve as they changed habits and stretched budgets to make ends meet. Understanding how and where shoppers rose to the occasion can help CPG brands improve customer loyalty and prevent brand switching in the future. Learn more in our Consumer Digest 2023 Year in Review report, Adapting with resilience: The new customer paradigm.  

If you’d like to learn more about shopper loyalty and brand switching, here are some additional pieces that might interest you: 

Hubspot: Research Finds Customer Loyalty Isn't What It Used to Be [2023 Data]: Customers are increasingly exploring different brands and shopping options. But does that mean brand loyalty is dead? This article by Becky Eldredge, 84.51° VP, Commercial Loyalty, provides insights about shifting shopper preferences and priorities, and what loyalty means to shoppers today. 

Maximize loyalty insights for better customer relationships: Customer loyalty is complex, and the factors that keep shoppers loyal to a brand are constantly changing. Learn why ongoing loyalty research and insights are necessary for brands need to understand shopper attitudes and implement effective strategies to drive growth. 

Protecting loyalty with pickup substitution analysis: As online grocery sales continue to climb, the out-of-stock substitution has becomes a growing threat to brand loyalty as shoppers are exposed to new brands when their first choice is not available. This article by Josh Kassman, 84.51° Senior Data Scientist, explains how understanding what happens when substitutions are made can help brands maintain existing relationships and even cultivate new ones.