Ask most marketers how consumers are behaving in 2026, and you’ll hear a consistent theme: conditions are more stable than the past few years, but purchasing behavior hasn’t returned to what it was before 2020.

The broader economy has settled compared to recent volatility. Inflation has eased from its peak, employment remains steady, and overall consumer sentiment has improved. On paper, the environment looks more predictable.

But consumer behavior still reflects the last several years of price pressure.

Shoppers continue to evaluate value more carefully. Even with inflation cooling, cumulative price increases continue to factor into everyday spending decisions. That has made consumers more deliberate at the shelf and more open to switching brands when the value isn’t clear.

This shift is visible across retail data. A Kroger consumer survey found that nearly 50% of U.S. shoppers now prefer store brands, compared to 37% who prefer national brands. Retailers have responded by expanding private-label assortments and giving them more shelf visibility. In some cases, including Target’s rollout of hundreds of lower-priced staple items, private-label expansion is being used directly as a value strategy.

For national brands, the challenge in 2026 is less about awareness and more about maintaining relevance at the point of purchase.

What changed in consumer behavior that affects brand promotions

Consumer behavior has shifted in ways that directly change how promotional programs perform.

Shoppers compare prices more often before they buy, and they’re quicker to switch brands when a better deal is available. This is especially true in categories where products are functionally similar and substitution is easy.

Store-brand consideration remains elevated compared to pre-2020 levels, particularly in grocery, household goods, and other high-frequency purchase categories.

Consumers are also more selective about the promotions they respond to. Broad, generic discounts tend to have less impact than offers tied to specific products, purchase occasions, or prior behavior. At the same time, loyalty programs and targeted incentives carry more weight because consumers now expect some level of recognition for repeat purchasing.

The result is a clear shift in how promotions are used. What was once primarily a short-term sales driver is now part of ongoing customer retention and brand defense.

Why private-label growth is changing competitive pressure for national brands

Private-label growth continues to reshape competition across retail categories.

Price remains one of the strongest drivers of purchase decisions, and retailers have invested heavily in improving the quality, packaging, and visibility of store brands. In many categories, the difference between national and private-label products is smaller than it used to be, both in perception and performance.

That does not remove the role of national brands. It changes how loyalty works.

Consumers are more willing to switch between brands based on price or promotion, even when they have prior experience with a national brand. Loyalty is still present, but it is more conditional and more influenced by immediate value signals.

In this environment, brands rely more heavily on promotions and loyalty mechanics to maintain presence between purchases and reduce switching behavior.

How brands are using promotions differently in 2026

Promotional strategy has become more structured than in previous years.

Rather than using a single tactic across all objectives, many brands now segment promotions based on what they are trying to achieve.

• Sweepstakes are often used to drive awareness and engagement during launches or seasonal moments
• Rebates are used to reduce friction for trial and support first purchase
• Coupons are used to influence conversion and defend share in competitive categories
• Loyalty programs are used to increase repeat purchase and long-term retention

This mix matters because each promotion type solves a different part of the customer journey.

For example, a coupon may influence a single purchase decision, while a loyalty program shapes behavior over time. A rebate may encourage trial, while a sweepstakes program may help a brand re-enter consideration in a crowded category.

Most brands are no longer choosing one approach but are combining them based on role and timing.

Do rebates and coupons still influence purchase decisions?

Yes, and in many categories, they remain one of the most direct tools for influencing choice at the shelf or checkout.

When products are similar in price and function, even a modest incentive can shift the decision. Coupons often influence immediate conversion, while rebates tend to reduce hesitation for first-time purchase or higher-consideration items.

These programs are commonly used to:

• Drive product trial
• Support new product launches
• Encourage repeat purchase
• Compete in price-sensitive categories
• Win back lapsed customers
• Maintain visibility during competitive retail periods

One reason they remain widely used is measurability. Brands can clearly track redemption, lift, and performance over time, which makes them a core part of performance-driven marketing programs.

We recently saw the impact of this with a rapidly growing food brand that entered a competitive grocery space. They needed to move product quickly while they solved a customer service hurdle, which required a professional, secure coupon program delivered in less than three weeks.

By managing the full lifecycle, from secure barcode generation and holographic printing to redemption and retailer reimbursement, we helped the brand secure a professional presence at industry events and drive first-time trials. The program succeeded because the client could focus on shelf distribution while we handled the technical and compliance requirements, which proves that even a tight turnaround can yield a high-performing and secure market entry.

Why loyalty programs now play a larger role in retention strategy

Loyalty programs have moved beyond points-based systems and are now at the center of retention strategy for many brands.

Consumers expect more than accumulation mechanics. They expect benefits that reflect how they actually shop.

Common structures include:

• Member-only pricing or exclusive offers
• Personalized rewards based on purchase behavior
• Tiered benefits tied to engagement or spend
• Seasonal or milestone-based rewards
• Early access to new products or releases
• Targeted promotions for high-value customers

For brands, loyalty programs provide two main functions: they help maintain repeat purchase behavior and provide visibility into customer-level purchase patterns that can inform broader marketing decisions.

When executed well, loyalty programs reduce churn and increase customer lifetime value, especially in categories with frequent purchase cycles.

What makes a promotional program work or fail in practice

The performance of a promotion often depends less on the offer itself and more on execution.

Across sweepstakes, rebates, coupons, and loyalty programs, several factors consistently determine success.

Consumer experience

If participation is unclear or time-consuming, engagement drops quickly. Small points of friction can have a huge impact on completion rates and redemption.

Alignment with the objective

Each promotion type serves a different purpose, and misalignment is one of the most common causes of underperformance. A sweepstakes is not a substitute for a conversion tool, and a coupon is not designed for long-term retention.

Operational execution

Promotions require coordination across validation, fulfillment, customer support, and reporting. When execution breaks down, it affects both performance and brand perception.

Compliance requirements

Sweepstakes, rebates, and coupon programs all come with legal and regulatory requirements that vary by category and geography. These need to be built into the program from the start, not added later.

Why promotional marketing remains essential in a more competitive retail environment

Consumers have more choice, more price transparency, and more access to alternatives than in previous years. That makes switching behavior easier and more common.

In that environment, brand loyalty is not static. It’s influenced by timing, value perception, and the strength of ongoing engagement.

Promotional programs are still one of the most practical ways for brands to influence purchase behavior in a measurable way. When structured correctly, they support trial, repeat purchase, and long-term retention while giving marketers clearer visibility into what motivates consumer action.

Looking for support with your next promotion?

Whether you’re planning a sweepstakes, rebate program, coupon campaign, or loyalty initiative, execution plays a hugely important part in performance. The structure of the program affects compliance, customer experience, and the ability to measure results against marketing goals.

By focusing on how these tools fit into the shopper’s daily routine rather than viewing them as standalone marketing tactics, you create a clearer path to turning casual interest into consistent sales. A well-run program does more than move inventory; it builds the necessary habits that keep your brand in the shopping cart month after month. Since we provide the administrative backing for promotional programs, we handle the technical requirements and daily management, therefore allowing you to focus on the strategy behind the offer.

The evolution of consumer behavior in an uncertain market

What motivates someone to make a purchase used to be as simple as how much you want or need it, and how much it cost. Those days are long gone, and now the science behind consumer behavior and customer retention strategies is a full-blown industry. There are a few constants but changing market conditions and how we live in the world around us means consumer behavior will always be a moving target.

The recent COVID pandemic upended not just what we thought we knew about consumer behavior, but also how much consumers and brands could pivot to adapt to shattered supply chains, health regulations and items that suddenly became “must-haves”. (Who knew we would be hoarding toilet paper, hospital-grade face masks and hand sanitizer?)

How 2025 tariffs are reshaping customer loyalty strategies

In 2025, tariffs, threatened tariffs, and retaliatory tariffs are once again forcing brands to think hard about how they engage with consumers, while continuing to deliver the products and value shoppers’ demand.

Tariffs are taxes that eventually roll down to consumers to pay once brands run out of options to mitigate costs. That means brands need additional tools in their customer retention toolbox to retain customers and grow market share. One effective tool is a well-designed loyalty program. Not only can it boost customer engagement, but brands with loyalty programs are also gaining important information that can help them deliver more value to their customers.

The data behind customer retention: why 79% of consumers join loyalty programs

A recent PYMNTS study found 79% of consumers surveyed said they participate in at least one retail membership, subscription or brand loyalty program. For brands, retaining customers and growing sales revenue are primary drivers for developing a loyalty program, however, there are also advantages to programs that reward participants simply for staying active.  In a competitive product environment customers have choices, meaning every brand has to work to keep and grow their market share.

Loyalty programs: costs to consider

A good loyalty program comes with costs. These include designing a program that helps you achieve your goals, enhances the customer experience, and follows compliance regulations. There are costs associated with the benefits and rewards brands give customers who participate in the program, and of course the costs involved in letting customers know about the program. Finally, brands will need to work with a partner or find the resources in house to build a platform the brand or their partners can manage, evolve, and keep the program running.

Designing the program begins by understanding your goals. Are you trying to keep customers from migrating to lower cost options? There was a time when customers were fairly brand loyal once they settled on a product they liked, but the pandemic changed that behavior. A McKinsey study that looked at consumer patterns following the worst of the pandemic found nearly 40 percent of consumers faced with a shortage of the item they wanted to buy were willing to switch products or brands to get what they needed. More than 30 percent switched retailers. A good loyalty program can entice a shopper to sideline their newfound wanderlust and stick with your brand.

Building a tariff-resistant brand through strategic loyalty design

Perhaps you are a B2B brand, and you face competition not just from other brands sitting on the shelf next to your product – but from their salespeople who are actively trying to woo your customer. This is where a well-designed loyalty program can incentivize your customers to stick with you. Discounts, prizes, and rewards are just as compelling for a B2B customer as they are for a B2C shopper.

Creating memorable brand experiences that keep customers coming back

It might be tempting to simply ride on the coattails of someone else’s loyalty program. This is especially true for CPG brands. Major retailers have their own loyalty programs that can highlight various products, thus offering brands the benefit of retaining customers at a much lower cost.

However, a retailer’s loyalty program is designed to keep customers loyal to the retailer, not a particular brand. And any brand relying solely on a retailer’s program is losing out on one of the most valuable benefits of a loyalty program, the opportunity to learn more about your customer. Brands can consider flipping the script by designing a loyalty program in partnership with a retailer, giving brands control over the customer experience – and feedback. Arrowhead has worked with clients to design and manage loyalty programs with retailers that resulted in significant engagement. While the program benefited the partner retailer, our clients gained valuable insights that will help them strengthen customer loyalty moving forward.

Your customers want to be heard and loyalty programs can be a great way to engage deeper with these participants. A brand can establish actual dialogue to share new product ideas, get audience feedback and more, including customers early access to a highly anticipated release, inviting members to special events, a way to share product samples, and conduct market research with people who are already your customers. These go beyond price to offer consumers value they won’t find elsewhere.

The name of the game: long-term retention and growth

Plain and simple, loyalty marketing programs are about keeping people loyal to the brand.  They can come in many flavors depending on your goals. Chief among them is offering value beyond just price. As competitive products improve in quality, it becomes increasingly harder to keep your customers – especially if your competitor’s price is lower. Loyalty programs are a great way to ensure you are using every tool at your disposal to engage your customers, offer them value, and understand how you can keep your customers moving forward.

Gain greater information gathering and sales through loyalty programs

Loyalty programs aren’t just for the travel industry. Manufacturers have been finding success through loyalty programs as well. This success comes in a number of ways, including learning more about their consumers. Most loyalty programs require consumers to provide personal information or create a profile, allowing businesses to track ongoing purchase behavior and gain a better understanding of their customers. By collecting this data, brands can identify purchasing patterns, preferences, and trends that they might otherwise not be able to access through retail partnerships alone. This valuable information can help manufacturers improve their offerings and develop more targeted marketing strategies.

Building stronger consumer relationships through loyalty programs

Once a brand or manufacturer gains deeper access to its end consumers, it can begin building stronger, more meaningful relationships. Loyal consumers feel a personal connection to a brand, which can lead to increased trust and repeat business. Beyond earning rewards, these consumers want to feel valued. Loyalty programs give businesses the opportunity to connect with consumers by offering exclusive promotions, early access to new products, or personalized recommendations. Communicating regularly and engaging with loyal customers ensures they feel appreciated and informed. In turn, these customers can also provide valuable feedback that helps businesses refine their programs, products, and services, fostering continuous improvement.

Loyalty program benefits: strengthening your brand and enhancing consumer engagement

The benefits of loyalty programs extend far beyond just offering rewards. They create a lasting bond between brands and consumers, enhancing overall consumer engagement. When executed properly, loyalty programs not only drive repeat business but also provide a wealth of consumer insights that can inform future marketing strategies and product development. These programs help brands better understand their customers and cater to their needs, improving the overall customer experience.

To learn more loyalty program benefits and our capabilities, ask your Arrowhead representative or contact us.