Two-thirds (65%) of Australians have revealed inflation and the rising cost-of-living have made them leave brands they were previously loyal to in order to save money, according to new research by customer engagement platform, Emarsys. 

In Australia, the ‘price-tag-takes-all’ attitude continues to be a dominating force behind loyalty towards brands. For the second year in a row, the majority (52%) of consumers fall under Incentivised loyalty, among the five loyalty types defined by the Emarsys Loyalty Index:

  • Incentivised Loyalty – loyalty developed through discounts, incentives and rewards
  • Inherited Loyalty – loyalty that’s built through association with other brands
  • Silent Loyalty – customer loyalty without public advocacy or endorsement
  • Ethical Loyalty – loyalty founded on emotional connections and shared values
  • True Loyalty – every brand’s dream, unshakeable loyalty that’s built through brand love

The research found nearly 70% of consumers typically switch products if a cheaper option is available. Additionally, over half (55%) of Australians would lose loyalty to a brand if it increased its prices followed, by poor quality products (49%) and a difficult shopping experience (34%). 

According to the research, in a year of financial hardship, almost two-fifths (37%) of consumers now prioritise cost over brand loyalty and over one-fifth (21%) no longer feel they can afford to be loyal.

Alternatively, the three factors driving consumers to be ‘more loyal’ are discounts, incentives, and reward offerings (67%), excellent customer service (56%), and high-quality products (52%). Almost four in five (79%) are ‘loyal’ to certain retailers with clothing and fashion (63%), food (49%), and beauty and skincare (40%) being the top three industries respondents are most loyal towards.

“All five loyalty types can drive consumers to make a purchase from a brand, but the category retailers should be striving for is True Loyalty. A recession-proof business requires brands to amplify personalised communication with customers and accelerate the range of products offered.” Emarsys regional vice president for Asia Pacific & Japan, Kristyn Wallace said.

“As inflation plays a large role in how consumers interact with brands and how they show their loyalty to their favourite retailers, marketers need to be more proactive than ever. It’s never been more crucial for brands to truly understand their customers: it’s not enough to be customer centric anymore, brands must be customer obsessed.”