Why discounts matter less to consumers than you may think
Honesty, transparency and kindness matter more than ever. Discounts are no longer the primary driver behind consumer behavior. In the second stage of EPAM Continuum’s Consumers Unmasked study, we explore which brands stand out and why.
EPAM reviews the importance of honesty, transparency and kindness in a recently-released study
Pandemic instability has changed how we act as consumers, changing the nature of retail as we know it. Amid the Omicron outbreak, we’re looking into into how consumer habits are evolving.
Last year, EPAM Continuum launched the first installation of Consumers Unmasked, a year-long study exploring the changing shape of consumer attitudes and behaviors. In our first report, the EPAM Continuum Consumer Council – a pool of 71 millennial and gen Z consumers across the US, the UK and Germany – gave us insights into their buying habits within five markets including food, fashion, travel, fitness and home.
While the first report of our Consumers Unmasked study was qualitative, the second stage takes a quantitative deep dive. With a survey sample tallying more than 3,000, we can pressure test the findings revealed to us by our council.
Building on a developing story
There’s no imminent end to the pandemic. In the three markets surveyed, restrictions remain – the only certainty is that uncertainty will be with us for the foreseeable future.
People are beginning to feel more comfortable and are now learning how to live in these unprecedented times.
Several of our initial assumptions were confirmed through this second report; others took us by surprise.
Confirmed: value for money matters most
It’s no surprise that value for money dominates consumer decision-making. As we found with our Consumer Council this summer, ‘value’ is a personal calculation of a product’s quality, durability and performance relative to its price.
What is most important to consumers when choosing who to spend their money with:
Surprise: discounts matter less
When our Consumer Council spoke about the importance of price in the first report, they weren’t just speaking about upfront costs. They were also referring to availability and access of discounts. Such issues were among the most important factors while shopping, but our latest survey reveals just 14% of the survey group suggests discounts are important.
When our consumers scored price second in their most important factors in our broader survey, price meant price and didn’t factor discounts.
Sustainability matters (but does it matter enough to make a behavioral difference?)
In our first report, brand ethics were less important to consumers than product or service value. That remains the case. But perceived importance of sustainability and social responsibility is increasing. When we asked respondents what they valued most about their favorite brands, sustainability and social responsibility scored highly.
Value may still outweigh other factors. But where value is equal, brand ethics may be a deciding issue.
Surprise: we’re still not paying for the gym
Three out of 10 people have canceled their gym membership because of the pandemic. Subscriptions lapsing during various lockdowns has hardly been a surprise but, for many, the relaxing of Covid restrictions has not been a trigger to return to the gym. The reasons are varied, but largely consistent across all our markets. Staying fit at home is now the preference, and a combination of cost, culture and comfort is keeping customers away from paying for the gym.
Why consumers no longer pay for the gym:
Surprise: affordability (not trust) is a reason not to travel
Reasons for choosing travel companies:
Price rules. But in our qualitative study, trust was revealed to be just as important to our Consumer Council when making travel purchases.
Half of respondents this time plan to travel internationally within the next six months, so it’s timely that our survey finds trust is now rebalancing, with price still the dominating factor.
This is, perhaps, a reflection that as the travel sector nudges closer to normality and the effect of vaccines enables more people to book with confidence, there’s less fear of vacation disruption.
Confirmed: honesty is the best policy
Be honest. Be transparent. Be humble. Be kind. Our consumers want value, but they would prefer to find that value from brands they can feel good about buying from. Increasingly, honesty is an essential element of brand loyalty.
What would make consumers stop buying from a brand:
Surprise: the world’s most popular brands
Amazon for its product choice, price and speed. Gucci for its feel-good factor. Nike and Adidas for their product quality, trustworthiness and conscience. It’s no surprise to see these brands so prominent in our consumers’ minds.
But what has surprised us is the relative positioning of brands. Ikea, for example, was highlighted as a favorite brand by more consumers than Asos, Coca-Cola, Pepsi, Apple, PlayStation, Samsung and Uber Eats combined.
Confirmed: messages to retailers remain consistent
If you could say just one thing to retailers, what would it be? Our final survey question revealed four common themes: keep prices low; nail the basics (in terms of getting customer service and the user experience right); invest in sustainability; and be innovative and technologically seamless.
It has never been more important for retail and CPG brands to stay close to their consumers. Throughout the upcoming year, we’ll paint a new picture of the consumer to help you do just that – and you can be part of curating the masterpiece. Read the research and register to follow the study here.
Alexander van Gestel, VP of consumer products at EPAM Continuum EMEA.
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