Lower Prices Win Greater Loyalty From Today’s Fickle Consumer

Maybe it’s hard for parents to pick favorites, but for consumers it’s easy.

Or at least that has always been the assumption.

But today’s consumer is an increasingly empowered and expectant one, whose loyalty is constantly being redefined and evolved based on the experiential features merchants provide them.

PYMNTS research in “Decoding Consumer Affinity: The Customer Loyalty To Merchants Survey” done in collaboration with Toshiba, reveals that when the balance of customer experience, low prices, rewards or convenience tips in favor of a competitor, more than one-third of “loyal” shoppers are willing to leave their go-to grocery and pharmacy products for those from another retailer.

Many pharmacy and grocery shoppers, it turns out, are actually loyal to the digital features that produce positive customer experiences — not the retail brand itself.

As the saying goes: everything has its price.

When all else is equal, their decisioning around loyalty boils down primarily to low prices, with more than 7 in 10 consumers telling PYMNTS that cost improves their loyalty to grocers (77%) and pharmacies (70%).

The cousins to cost, promotions and discounts, are cited as the second most potent loyalty driver. Simply having the desired item in stock is a close third at 51% for grocery and 47% for pharmacy.

Within today’s challenging macroclimate, consumers are looking to cut back on everything but the necessities and frequently can’t afford to be loyal to their favorites when they spot a better deal.

And in an operating environment full of historic inflation, rising interest rates, and ongoing supply-chain disruptions it may be tough for retailers to offer the cost-savings their shoppers want.

As deal-chasing becomes the dominant shopping determinant du jour, grocers, pharmacies, and retailers more broadly need to identify the digital features and loyalty promotions they can provide in order to promote customer stickiness and accelerate retention.

All consumers report to PYMNTS that their ongoing loyalty is connected to features apart from pricing — and, after all, deal-chasing consumers and their conditional spend may not end up being the most profitable customer base from a lifetime value standpoint.

Even in challenging times, building brand loyalty remains a crucial customer retention strategy.

For more details on what today’s operating environment and its corresponding behavioral sentiment means for your business, download the free PYMNTS report, done in collaboration with Toshiba, “Decoding Consumer Affinity: The Customer Loyalty To Merchants Survey.”