Competitive Pricing

The impact of Covid-19 on brand loyalty

Skuuudle insights report

Covid-19 has had a significant impact on customer behaviour and business priorities. It has changed the way we do business, and it has changed the way consumers shop, driving a large amount of retail activity online.

Alongside the shift to eCommerce, one of the big takeaways from the pandemic is a change in brand loyalty.

Why has the pandemic impacted brand loyalty?

During the early days of the pandemic, many brands experienced stock shortages or delays, while others were having to close their doors altogether. This forced some consumers to shop around for goods they previously bought from a brand. As a result, many loyal customers had to switch for the first time.

The result? While this switch may have been based purely on necessity, it led many customers to realise that they could get comparable products of a similar or higher quality from other suppliers, perhaps at a better price.

Thinking about the same period last year, how much more likely would you say you are to shop with a company that you haven't used before, based on price?

Chart

In fact, according to our consumer data, 34% of those asked were more likely to shop with a brand they hadn't tried before, compared to before the pandemic.

Even as stock issues were resolved and stores consider re-opening their doors, this shift in brand loyalty may have changed for good.

According to McKinsey, “We expect these changes will shape consumers' habits even beyond the effects of COVID-19. In…the U.S., upward of 60% of consumers who tried a new behaviour plan to stick with it post-crisis.”

The opportunity

If brand loyalty is now significantly more fragile, and consumers are more likely to switch than ever before, how can you take advantage of this opportunity?

First, you must understand your target audience, specifically the age demographic. If we dig deeper into the results of those who are more likely to change to a new brand. We see a startling difference in intention to switch brands by age groups.

Age Group Chart

According to our consumer data, almost half of 18-24 and 35-44-year-olds responded that they would be more likely to shop with a company they haven't used before, based on price.

Given consumers' price sensitivity, value will remain the main reason for consumers to try a new brand. Convenience and availability will also continue to drive consumers' decisions about where to shop.

Three factors are merging to create a perfect storm of opportunity and allow brands of all sizes to attract new customers.

  1. The decline of brand loyalty and the possibility to gain new customers faster than before.
  2. The rising importance of price in attracting new customers.
  3. The ease at which customer can find value in the market.

There are considerable rewards to be had by gathering your market data and positioning yourself correctly with all 3 of these factors at the center of your strategy.

Retaining your customer base

Of course, while this presents a host of opportunities for brands to capture new customers, it also means they must perform better if you want to retain them. Again the primary focus for retention is price.

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Our consumer report on price revealed that 80% of consumers believe price to be very or somewhat important when making purchasing decisions. 40% stated they were spending more time comparing product prices than they did last year.

Whilst price should be at the centre of your strategy, it is also vital that you keep eCommerce best practices in mind. After all, growth opportunities are undoubtedly there, but you need a stable platform on which you can build.

That means making an excellent first impression by:

  • Making sure your website look and performs well.
  • Making sure products are easy to find and are in stock.
  • Ensuring the checkout process is as easy as possible.
  • Having a quick and responsive live-chat feature.

Having these foundations in place will allow you to gain new customers based on price. Once you have converted these customers, outperforming competitors based on performance and customer satisfaction will help you retain them in the long term.

Customer service must be responsive, helpful, and well-informed to achieve the desired effect. It's essential to listen to your customers and understand why they use your brand and how you can retain them. It's also necessary to monitor your competitors, ensuring you're aware of their promotions, products and strategies.

With Skuuudle, you can quickly and easily monitor your competitors’ prices, with no manual input required. Get in touch to find out how we can help you attract and retain customers in the post-pandemic world.

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