How can brands better tap into this dynamic?
As consumers become more strategic about their spending, their interactions with brands are evolving, and understanding these shifts in consumer behaviour is crucial for businesses hoping to win customer loyalty in 2025 and beyond. Our cost-of-living data offers some valuable insight into how customers may be responding differently to products, services and marketing messages in today’s more uncertain landscape.
Just as consumers told us they are trying to find the ‘sweet spot’ between security and comfort, so too does a company’s branding and marketing messages need to tread this fine line – and push the message of ‘small luxuries’ that a consumer can enjoy while not putting themselves in financial peril.
When we looked at the buying behaviour around specific items such as soft furnishings, the factors that consumers now prioritise came out as ones of ‘Comfort’, ‘Quality’, and ‘Value For Money’ — with factors like ‘Sustainability’ and ‘Style’ now trailing behind in importance when it comes to making a purchase decision. Again, this reflects the increased significance that consumers are placing on finding the perfect intersection between quality, comfort and affordability and it’s only by tapping into this message that businesses may find a point that best resonates with today’s consumers.
While people are tightening their belts, consumers’ continued demand for spending on socialising, travel, and personal well-being highlights an enduring attachment to growth, new experiences and joy. For many brands, this may mean marketing messages, deals, offers, or pricing strategies that have to strike a balance between these two competing messages and highlight the ‘good value’ of their products or services whilst also playing up the element of adventure, escape and of lifestyle propositions that offer an increased quality of life and well-being.
Ultimately, businesses will need to respond to these shifting dynamics in a way that reflects the specific value proposition of their products or services. This may well be different for every business and industry sector. In financial services, for example, customers’ desire for financial security may drive demand for products with fixed interest rates. In the travel sector, a preference for frequent but smaller trips may reflect tightening budgets. Meanwhile, sectors like retail and hospitality may benefit from offering more regular, affordable indulgences rather than focusing solely on high-ticket items.
