Nisa Local, Elmbridge Parade 6

Although for some the cost of living crisis is easing, it continues to play a significant role in shifting consumer behaviour. Brands and stores alike are being forced to reconsider how they can inspire loyalty in an environment where consumers are looking to reduce their outgoings, according to a new report from advertising platform Cardlytics.

The State of Spend: Customer Loyalty report, based on the spending habits of over 22 million UK bank accounts, along with a poll of 2,000 UK adults conducted by Opinium assessing customer loyalty, found that despite consumers being increasingly cost-conscious there is still room for brand loyalty to influence spending behaviour.

Seven in 10 (69%) UK adults view trust in a brand as important when making a purchase, whilst three fifths (59%) say they have been loyal to brands for “as long as they can remember” - a clear indication that brand loyalty is alive. Yet affordability is vital in shaping and influencing purchasing habits, the report reveals. UK adults rank price as the most important factor in their decision-making process, followed by trust in a brand and convenience.

This report examines three specific categories - retail, hospitality and travel - which together demonstrate a clear trend of customers having to balance commitment to the brands they know and love, with limiting financial outgoings. With consumer behaviour in flux, the report includes analysis on some of the factors creating this environment, along with recommendations for business leaders on how they can inspire brand loyalty whilst attracting to new customers.

Understandably, affordability was revealed as the key factor, but store loyalty remains an important factor for many shoppers, with over half (54%) choosing to travel to shop at their preferred store or supermarket, even if other options are closer. This should serve as further encouragement for stores that reward their customers for staying faithful, particularly in times where confidence in spending is low.

Lucy Whittemore, senior vice president of UK Advertising Advertising at Cardlyticssaid: “Whilst affordability will always be key for consumers, building brand loyalty is key. Whether it’s restaurant-goers sticking with what they know or customers travelling further to take advantage of their favourite supermarket’s loyalty card system, consumers are making savvy decisions based on what suits them – and often, which brands treats them best.

“For businesses in retail where competition is high and interaction with customers is frequent, data will be key. By gleaning insights from customers’ spending data, brands can create tailored, relevant offers for consumers – both new and existing. This can help build a deeper connection with the customer, fostering loyalty and trust to drive footfall and incremental growth in spend.”