New Rakuten Study Reveals Shopper Loyalty Hangs in the Balance

A new study from Rakuten, in collaboration with The Harris Poll, has uncovered a disconnect between shopper brand loyalty and retailer confidence. The findings suggest that while retailers remain optimistic about the year ahead, an increasing number of shoppers are placing more emphasis on price than brand allegiance, reinforcing a broader shift away from traditional brand loyalty that’s been unfolding in recent years. 

The price is right… or else

A staggering 55% of consumers report they’ll be actively seeking the lowest prices in the coming months, driven by continued inflation and tighter household budgets. In contrast, only 5% of retailers believe shoppers will actually switch to cheaper, lower quality brands. This gap could mean retailers are missing key opportunities to adapt their strategies and better meet the needs of shoppers who are prioritizing value over loyalty.

Retailers remain overly optimistic

While nearly three-quarters (73%) of retailers are confident they’ll hit their sales targets for the first half of 2025, the study paints a different picture of the consumer landscape. Many are struggling to afford basic necessities:

• 19% can’t afford household bills.
• 17% can’t afford necessities like food and gas.
• Over a quarter (28%) are cutting back on personal purchases.
• A significant 41% plan to shop less overall.

This financial strain, coupled with ongoing concerns about inflation (cited by 39% of consumers as the biggest influence on their shopping plans), suggests that retailers’ optimism might be, well, overly optimistic.

Grocery prices have a large impact on how consumers spend

The rising cost of groceries is having a ripple effect on consumer spending habits. Fifty-seven percent of shoppers say that higher grocery bills are forcing them to cut back on non-essential purchases. While some consumers are sticking with their preferred brands despite the higher prices (41%), a significant portion (39%) are actively switching to cheaper alternatives.

So, what’s a retailer to do? 

A shift in marketing priorities is crucial. While many retailers are increasing their marketing budgets and focusing on social media, search, and display according to the study, the key to success in this environment lies in performance-driven strategies like affiliate marketing.

Julie Van Ullen, Chief Revenue Officer at Rakuten Rewards says, “This year, retailers will need to prioritize marketing strategies like Cash Back that are proven to drive sales. These strategies are effective for incentivizing shoppers and providing them with permission to buy, without the need for retailers to discount and eat into their margins. Reallocating marketing budgets away from general brand awareness and focusing on conversion and getting people to hit the Buy button is a step in the right direction, but more retailers will need to make affiliate marketing a priority if they want to meet their sales objectives.”

The bottom line

Brand loyalty isn’t necessarily dead, but it’s being tested. To thrive in this challenging environment, retailers need to:

• Acknowledge the price sensitivity of today’s consumer.
• Re-evaluate marketing strategies to prioritize performance and value.
• Embrace incentives like Cash Back to drive sales and build lasting relationships.

Contact us today to explore how Rakuten Rewards can help you connect with value-conscious shoppers and achieve your business objectives.