Inflation: Challenging Brand Loyalty & Shopping Habits

How Consumers Feel and What Advertisers Can Do

By Deirdre McFarland, SVP of Marketing

How crazy is inflation? Sand dollars might as well be worth $2.00 according to this meme floating around. 

It’s fun to crack jokes but inflation for consumer goods is up almost 13%, and it seems like everyone is talking about how it’s impacted their lives. However, consumers are doing a lot more than just talking. they’re  changing the way they shop.

To get to the heart of this inflation frustration, NCS analyzed purchase data from the CPG products we track to truly understand the rate of price increases.  We didn’t stop there – we also asked consumers how they feel about current price increases and the impact it’s having on their shopping trips.

Yes, Food-Inflation is Really High

The year-over-year inflation rate for CPG products is the highest since we started tracking in 2017. What’s egg-ceptionally more expensive at almost a 30% increase since last year? Eggs. While cheese is at the low end, under 4%.

Stress-Flation

The pandemic and supply chain burdened consumers with a lot of stress. So how do they feel now about all of these price increases? We commissioned a nationally representative survey of over 2000 Americans about their attitudes towards inflation, and we learned that consumers are feeling the pinch. Not only are they worried about inflation but they are also worried about feeding their families - to the point where over two-thirds (68%) do not feel their current situation can withstand any more price increases. This focus on budget and cost could be harmful to your brand if consumers seek lower cost alternatives.

What Can Advertisers Do?

The next few months – back to school, Labor Day, fall sports, Halloween, Thanksgiving and winter holidays – are big opportunities for CPG advertisers. But if buyers are holding back on their spending or not buying your brand, what should marketers be doing now?

For starters they should continue to advertise. NCS research has shown that brands who continue to advertise maintain growth, while brands who curtail ad spend lose market share (check out our report Loyalty In The Time of Covid). It’s important that brands continue to reach out to their loyal consumers and remind them why they love their brand. 

Brands should also be empathetic to consumers’ budget-focused mindsets. Today’s consumers are looking for deals and less expensive alternatives. Message the value your brand offers.

Lastly, target likely buyers with purchase-based audiences, optimize your campaign in-flight for the elements that are driving the most incremental sales and measure what tactics worked and didn’t work for future campaign planning.

There's More to This Inflation Story

How are consumers affected and how is their purchase behavior changing? Using  results from a recent consumer sentiment survey, we created a guide that provides plenty of insights and actionable marketing tips.

Check out: FOOD-FLATION, The Rising Cost of CPG for insights on consumer sentiments and advice for brands on how to continue to grow market share.