As consumers express increasing optimism about their current lives, a new EY study highlighted the crucial role of loyalty programs in navigating economic challenges.
The 14th edition of the EY Future Consumer Index (FCI), a global study surveying 23,000 consumers across 30 countries, including 1,500 in the U.S., indicated that American consumers are optimistic about the future.
More than three-quarters (77 per cent) of consumers noted that they think their lives are the same or better now than three to four months ago. Despite easing inflation, the act of saving has become an ingrained consumer behaviour across demographics, with shoppers turning to loyalty programs, private labels, and discounts to cut costs on items they want and need.
Loyalty programs have become more critical than ever. For the past few years, consumers have been balancing a tightrope between brand loyalty and savings. Many consumers have foregone brand affiliation in favour of savings. In the U.S., 49 per cent of consumers noted they’d be willing to download a brand’s app just to receive loyalty promotions or exclusive deals, and 70 per cent would join a company’s loyalty program for free shipping perks. Additionally, 45 per cent used a discount code or voucher while online shopping in the last six months.
“Sales have gone from specific moments in time, like Black Friday and back-to-school, to consistent opportunities for deals — and strong loyalty programs elevate that culture of consistent savings even further,” said Kathy Gramling, EY Americas consumer industry leader. “At the same time, loyalty programs provide brands and retailers with invaluable consumer data to better inform products, programs, and personalized experiences. Winning brands are those that use the data found in loyalty programs to not only attract new customers but also retain and reward existing ones.”
Despite the shift towards online shopping during the pandemic, there’s still significant value in going to the store. The report noted that EY is seeing a notable pivot away from online-first shopping behaviour today. When asked about the main drivers to in-store shopping, 59 per cent of consumers said they make the trip in-store to see, touch, and try items before making a purchase, while 57 per cent noted a desire to bypass shipping.
Consumers have also begun to increasingly value human interaction during their post-purchase journey. More than half (56 per cent) of U.S. consumers noted that interacting with humans is extremely important during product returns and refunds, and an additional 55 per cent found it extremely important when looking to discuss questions or concerns about a product they already bought.
Security remains a significant concern that brands need to address. While consumers continue to shop online, brands must create a sense of security, especially as feelings of distrust rise among consumers. In the U.S., 63 per cent of consumers express extreme concern around online ID fraud and theft, and 60 per cent note extreme fear when it comes to data breaches.
“We are seeing an ongoing juxtaposition between the data consumers are now willing to share online and their concern around data privacy and security,” says Isaac Krakovsky, EY Americas retail leader. “This divide becomes even more evident when there are incentives and deals in play. For brands, this means security and communication around security is a must-have in driving long-term trust.”
Image credit: Depositphotos.com
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