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March, 2024

Aussies sacrifice brand loyalty amid cost of living crisis: M&C Saatchi

M&C Saatchi Group has published the third wave of its ‘Cost of Living Crisis and what Australians want from brands’ research report, revealing that brand loyalty has taken a hit as Australian consumers face mounting financial challenges.

The research found that buying home grown is no longer viable for many Australians, with 49% buying less Australian products or brands. The trend carries across to brand loyalty more broadly, with 71% of respondents admitting they were less loyal to the brands they would normally use – this was even more pronounced within the 50-89 age group, where 80% affirmed the behavioral shift.

“After 2 years of increased prices across most categories and 13 interest rate adjustments, Australians are experiencing more uncertainty than before. Consequently, we have observed a more uncertain and pessimistic customer outlook” said M&C Saatchi Group Head of CX, Melinda Lofts. “As a result we are seeing customers sacrifice their values by buying fewer sustainable products, trading down and purchasing fewer Australian brands.”

The report reveals that today’s customers are more open to substitution (85%), using loyalty programs more (81%), making products last longer (89%), spending more time researching products and seeking discounts (80%), visiting multiple shops to complete their shop (68%), and buying more online (47%).

In addition, the report has uncovered a pronounced increase in negative emotions, signifying a substantial shift in the collective mood of the nation. This was especially prevalent amongst younger generations who felt more worry, anxiety and fear than more mature age groups. Higher percentages of Gen Z and Millennials reporting feelings of being ‘Depressed’ or ‘Distressed’ suggest that young people are facing more stress in relation to their finances.

The report reccomends that brands look to take steps to help customers through the cost of living crisis, such as providing more tangible value for customers, prioritising loyal customers, helping customers with tools to aid planning their shops, investing in customer service, prioritising brand reputation and building, and not creating a one size fits all solution.

“To stay in a customer’s consideration phase, brands need to adapt to new customer behaviours – less sporadic spending and more intentional, conscious consumption,” said Loft.

The research was conducted by M&C Saatchi Group’s marketing sciences division, Precision, utilising Dynata Global Australian Research Panel.