Consumers are feeling squeezed. They’re paying closer attention to what they spend, where they spend it, and what they’re getting in return. For brands, that makes this an important time to give consumers an added reason to buy.
Economic confidence improved slightly this summer, but the bigger picture remains challenging. Gallup reported in July that 67% of Americans believe economic conditions are getting worse, while 44% rate current conditions as poor.
But consumers haven’t stopped spending. They’re simply paying closer attention to where their dollars go—and brands need to give them a compelling reason to spend with them.
That’s where incentives come in. Rebates, discounts, loyalty rewards, cash back, gifts with purchase and other promotional incentives can add value at a time when consumers are looking for it. And with back-to-school underway and the holiday shopping season approaching, now is the time for brands to make sure those incentives are working hard enough to win the purchase.
Consumers are shopping. They’re also shopping around.
The pressure on brand loyalty is real. NIQ’s Consumer Outlook: Guide to 2026 found only 12% of consumers surveyed said they would stick with their regular brands regardless of price. Consumers are looking for value and remaining open to alternatives.
For brands, this creates both a challenge and an opportunity.
When consumers are deciding among products they know and trust, an incentive can help tip the purchase decision. A lower price can certainly do that, but price isn’t the only lever. Loyalty points, cash back, a rebate or gift with purchase can add value while giving consumers another reason to select your product.
The incentive doesn’t replace the value of the brand. It helps reinforce the value of choosing it.
Drive sales now—and give customers a reason to come back
Not every incentive needs to accomplish the same thing.
Short-term incentives such as rebates, coupons and discounts can drive an immediate burst of sales. A limited-time offer creates urgency and gives consumers a reason to act now rather than postpone the purchase or choose another brand.
A recent consumer packaged goods client at Arrowhead launched an escalating incentive that put more cash in their customers’ pockets for making more purchases during the month of July. This incentive promotion drove a substantial spike in product sales for the client that would not have occurred otherwise.
Longer-term incentives such as loyalty programs have a different job. They create value over time and give brands opportunities to engage consumers between purchases, encouraging retention and repeat business.
The strongest strategy isn’t necessarily choosing one over the other. It’s understanding what you need consumers to do and building the right mix of incentives to support both immediate sales and longer-term retention.
Back-to-school offers a preview
We don’t have to speculate about whether consumers are looking for incentives. The 2026 back-to-school season is giving brands a pretty good preview.
The National Retail Federation reports that 78% of back-to-school shoppers expect higher prices this year. Among consumers who hadn’t completed at least half of their shopping by early July, the National Retail Federation reports that 46% were waiting for the best deals and 23% were spreading purchases out to manage their budgets. More than half shopped major June sales events specifically for school purchases.
And yet, consumers are spending. NRF expects K-12 back-to-school spending to reach a record $43.3 billion this year.
That’s an important combination for brands to recognize: Consumers may be unhappy about prices, but that doesn’t mean they aren’t buying. It means brands have to work harder to win the purchase.
As we move from back-to-school into election season and then the holiday shopping period, consumers will continue looking for ways to minimize spending while maximizing what they receive. For marketers, now is the time to make sure incentive strategies are ready to compete for those dollars.
Don’t make consumers work for it
A strong offer can lose its power quickly if participating in the promotion is too complicated.
Brands need to understand not only what consumers value, but what they are willing to do to get it. Too many steps, confusing requirements or unnecessary friction can reduce participation. The incentive needs to be compelling. Getting it needs to be simple.
After more than 40 years helping many of North America’s leading consumer brands execute promotions, Arrowhead has weathered plenty of economic shifts. The circumstances change, but brands still need to find ways to engage consumers, drive sales and keep customers coming back.
Right now, consumers are telling brands what they need: more value for the dollars they’re spending.
Give them a reason to choose you.
