Half of Consumers Stopped Buying A Brand Due to the Pandemic

March 31, 2021

Merkle Reasons Consumers Stopped Buying Brands Due to COVID Mar2021It’s become a cliche to say that 2020 was an unprecedented year. US consumers were faced with a contentious election, social unrest and, of course, an ongoing pandemic that, along with threatening the health of the population, also took a financial toll on many. Through all this, a report [download page] from Merkle reveals that close to 6 in 10 (57% of) consumers remained loyal to a brand.

Being loyal to a brand and being able to purchase that brand can be different things. While almost half (49%) of the more than 1,500 consumers surveyed say they did not stop purchasing from a brand because of the events of 2020, the other half did so for several reasons.

For one-quarter (24%) of respondents, a reduction in spending due to changes in their financial situation was what led them to stop purchasing from a brand. This tightening of the purse strings could be seen early on in the pandemic, with a Gallup survey finding that in April 2020 half (51%) of US consumers reported spending less than they once did.

While some consumers have been forced to cut back on spending, certain areas thrived during the last year. Catalina research found that although US shoppers were taking fewer trips to the grocery store, they were spending more when they did visit. However, 64% of consumers surveyed by Valassis cited affordability as one factor that influences their purchase of specific brands. In fact, some respondents to Merkle’s survey said they started using a brand because it provided a better discount or price than their previous brand.

Getting involved in social issues can be a tricky proposition for brands. On one hand, a brand’s stance on issues such as the social justice movement can have a positive effect on brand loyalty, and a majority of consumers feel that brands are effective in raising awareness and educating people on public issues.

On the other hand, taking a stand on an issue can lead some to stop purchasing from the brand. Indeed, 16% share of those surveyed by Merkle said they stopped buying a brand because they did not agree with the brand’s stance on societal issues. Separately, though, some switched to a brand because they agreed with the brand’s public stance on societal issues.

Loyalty Programs

When it comes to joining loyalty programs, this year consumers remain drawn to the potential to receive discounts (44%) or to earn free products (26%). Here are some other highlights regarding loyalty programs from the report:

  • Being able to earn points to redeem for discounts is the preferred type of loyalty program;
  • The loyalty benefits and rewards consumers like most are discounts (70%), free products (65%) and free samples (51%);
  • However, they are less pleased that their loyalty programs take too long to earn a reward (45%) or make it too difficult to earn rewards (31%);
  • More than half say that they are comfortable with brands using their purchase history (54%) or current reward status (54%) to make the reward experience more relevant to them; and
  • In return, they would like to receive personalized offers based on past purchases (64%).

The full report can be found here.

About the Data: Findings are based on a November 2020 survey of more than 1,500 US consumers ages 18-65.

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