Ask anyone how the economy is doing these days and you’re likely to get an eyeroll. Recent numbers point to a continued strong job market and consumer sentiment is shifting toward a more positive outlook, but are consumer purchasing habits in alignment with government reports?
A closer look tells us while inflation has fallen considerably, it’s not a straight line to the 2% the Federal Reserve is seeking. Consumers still feel pinched by prices that rose quickly during the pandemic, but have been much slower to fall.
Shoppers are taking action. A recent Kroger consumer survey found nearly 50% of U.S. shoppers said they prefer to buy store brands, compared to 37% who prefer national brands.
Retailers have taken notice, too, placing their in-house brands more prominently on store shelves. Target just announced a new line of 400 staples, some priced under a dollar to bring shoppers into the store as well as compete with more expensive national brands.
All of this is a threat to brands looking to maintain and grow their customer base.
Savvy brands understand to keep shoppers onboard they have to work a bit harder. It’s a pivot from two to three years ago when high demand and supply chain logjams had brands and retailers struggling just to keep products on the shelf. A solid, modernized strategy for promotional campaigns remains key to customer engagement in 2024.
For some industries, that might include a fresh outlook on loyalty programs that reward consumers for their business. Points and members-only deals aren’t just for the airlines. Loyalty programs give brands better insights into their customers for more customized experiences shoppers have come to expect. From free birthday gifts and tiered rewards, to friends and family discounts, loyalty programs not only tie shoppers to specific brands, they often entice shoppers to spend more.
Food and beverage brands are particularly affected by inflation fatigue. These brands are feeling pressure from shoppers jumping to cheaper store brands, and they also may be losing market share to new products. As states continue to legalize cannabis products, the adult beverage industry is seeing a wave of CBD and THC products hitting the shelves, just as movements like Dry January continue to grow and the use of alcohol is declining among younger generations. Rebates and coupons are especially important for these industries to gain new customers in a crowded marketplace and keep the customers they already have.
When price is a consideration between two brands, rebates or coupons could make up the difference, or entice a shopper to try something new. For current customers, these offers might give them another reason to stick with their brand.
How you craft and implement your promotions strategy is key to success. Are you taking advantage of the latest technology to ensure not just value, but also a good experience for customers? Do you require customization? A white-glove experience for loyalty program members? Are there legal considerations for your industry and how will those be met? And for any brand, are you compliant with all rules and regulations in every region where your campaign will take place?
A well-planned promotions strategy will help customers find your brand and provide reasons for them to become or remain loyal customers. As shoppers keep an eye on their wallets, no brand can afford to ignore modern approaches to customer engagement.
