1. Inflation is influencing how and where consumers spend
Consumer shopping habits continue to transform. As inflation-related concerns persist, shoppers are adopting more cost-conscious strategies, consolidating their spending to fewer stores and brands, and seeking out discount-ready alternatives.
This shift in purchasing behavior extends to the holiday season. As consumers become more selective and judicious about their purchases, strong, value-driven customer loyalty programs will help brands to heed this call for discounts and promotions.
More than three-quarters of consumers (78%) report consolidating their shopping to fewer stores and brands, switching to more cost-efficient brands and using customer loyalty or reward programs more often.
- 8 out of 10 consumers report being impacted by inflation over the past 12 months
- While gift shopping for the 2023 holiday season, over 40% of consumers expect to use discounts and promotions more often than last year
- Nearly half of consumers (49%) expect to spend less on dining out, events, and leisure activities in the next 12 months
- In the past 12 months, 74% of shoppers agreed they spent more time researching before purchasing, which shows consumers are also dedicating more time to finding the best products and deals
Expert take: The idea of a “cost-efficient brand” — and the consumer preference for it — is something that will continue to gain steam. Marketers pairing their most reliable channels with positioning that blends convenience and savings stand the best chance for fostering customer loyalty in an increasingly competitive market.
By prioritizing customer loyalty initiatives, brands can forge trust by offering tailored discounts through the responsible use of customer data.
AL DUPONT, RRD’s Chief Commercial Officer
2. As consumers grow tired of digital communications, direct mail reasserts its presence
In this age of digital tendencies, marketers face a delicate balancing act between cultivating brand loyalty and respecting consumer privacy. While digital channels offer powerful tools for reaching and engaging customers, consumers are increasingly overwhelmed by the sheer volume of digital communications.
This digital fatigue, coupled with growing privacy concerns, is driving a shift in marketing strategies, with marketers re-evaluating their reliance on digital channels and doubling down on the tried-and-true channels that offer more reliable performance.
Marketers' preference for channels with proven return on investment more than doubled over the past year:
- Consumers report being overwhelmed by digital brand communications: email (69%) and social media (61%)
- One in five consumers report having deleted a social media account in the last year
- 46% are more cautious about sharing personal data online
- 56% report being at least sometimes uncomfortable disclosing personal information online with brands or companies offering rewards or personalized experiences
- 93% of marketers report that growing privacy concerns have influenced their digital marketing strategy
Three-quarters of marketers reported reallocating some of their marketing budget into direct mail.
- 42% of consumers reported an increased interest in receiving direct mail compared to a year ago
- Younger generations were most interested in direct mail, with 61% of those aged 18-26 agreeing with this sentiment
- Consumers report an affinity toward direct mail because they like having a physical copy of information to refer back to (47%), it being easier to remember than email (30%) and it being fun to open (28%)
Expert take: Direct mail offers marketers a means to connect with their audiences in a way that feels intimate without feeling invasive. This tried-and-true marketing channel serves as a personal and tangible connection point with consumers that continuously proves to perform.
That’s the enduring appeal of direct mail: endlessly testable and equally customizable, it can produce at-home engagement no matter the age of the audience. This is especially important in an era of digital overload where a constant barrage of electronic communication can become white noise — whether we know it or not.
STEFANIE CORTES, Director of Strategic Analysis for RRD’s Direct Marketing Group
3. Marketers are prioritizing sustainability for future generations as consumer values shift
As younger generations, particularly Gen Z, represent a growing segment of the consumer market, marketers recognize the need to adapt to their evolving preferences. While sustainability is considered an increasingly important factor for brands, consumer behavior suggests that other aspects such as product quality, value, and ethical practices hold greater sway in purchasing decisions. This is especially true for Gen Z.
These findings highlight the need for marketers to strike a balance between embracing sustainability initiatives and focusing on the core elements necessary to connect with younger generations and encourage brand affinity.
Nearly all marketers (99%) agreed that their brand’s sustainability practices will become increasingly important as younger generations represent a greater share of the market.
- On average, over half of marketers feel that organizational changes are necessary in the areas of quality, value, commitment to diversity/inclusion, and sustainability in order to keep pace with generational changes
- Gen Z (66%) consumers were not nearly as likely as millennials (80%) to weigh a brand’s sustainability practices when making a purchasing decision
- Among Gen Z consumers, the top driving factors when making purchasing decisions include the value of products/services (77%), brand’s reputation (73%) and treating employees fairly (71%)
Expert take: As we navigate the shifting consumer landscape, it's crucial to recognize that younger generations hold the key to shaping the future of marketing. While sustainability is undoubtedly a growing concern, it's essential to understand the nuances of each generation's priorities.
For Gen Z, value, reputation, and ethical practices reign supreme. To truly connect with these consumers, we must go beyond mere messaging and align our brands with their values, ensuring that our actions reflect our commitments. Embracing this holistic approach will not only foster brand loyalty among younger generations but also position thoughtful brands as leaders to a generation becoming a larger and more influential consumer base.
KIRAN SHANKAR, President of RRD GO Creative℠