Consumer Pulse - Price Sensitivity in the Age of Inflation | April 2, 2024

The current state:

With their wallets top of mind, 87% of consumers admit to keeping a close eye on the cost of everyday items, especially Boomers and Gen X. This heightened vigilance has led three-quarters of consumers to alter their purchasing habits, opting for different products and brands in response to the financial squeeze.

How we’re feeling right now:

• Of those consumers who have switched brands due to price increases, 85% have discovered new favorite products, highlighting a significant shift in brand loyalty driven by economic pressures. 
• 27% of Americans have observed declining prices, with Gen Z being notably more attuned to these changes. This variance underscores the diverse impacts of inflation across age groups and the potential for tailored marketing approaches.
• While less than half (44%) anticipate price decreases in the near term, a substantial 68% express willingness to revert to familiar brands should prices become more favorable, indicating a nuanced balance between cost-consciousness and brand preferences.

Why it matters:

In an era marked by inflation and financial uncertainty, understanding consumer price sensitivity and the conditional loyalty to brands becomes paramount. This environment presents a unique opportunity for brands to engage with their audience through thoughtful pricing strategies, quality assurance, and clear communication about value. Navigating these dynamics effectively can not only help in retaining a diverse customer base but also attract those exploring new options due to financial constraints.

Do you want to take the Pulse of your customers? Our Insights team will partner with you to design a study to help you better understand your customers and their problems, and how your brand can win at retail. 

To get additional insight into what this means for brands and retailers, read the entire study.