This article appeared in Street Fight. Read it in full here.
A new study from Resonate reveals that consumers are radically changing their spending behavior and becoming less loyal to brands due to inflation.
A whopping 97 percent of consumers have changed their spending, and about 19% have bought different brands or shopped at other stores or online because of prices. The full report can be found here.
We had the pleasure of speaking with Ericka McCoy, Resonate’s CMO, to talk about the study and how AI is transforming consumer insights and analytics.
What does Resonate do?
“We’re an AI-powered consumer data and intelligence company that predicts future consumer behavior. We can empower a brand to know anything about any consumer at any time. Resonate pioneered the use of AI predictive modeling starting in 2008. One of our specialties is understanding the ‘why’ behind audience behaviors to help brands scale. We aim to deliver a more personalized world, using data and technology.”
Has brand loyalty been declining?
“Yes! From July 2022 to now, we’ve seen a huge change in brand loyalty. CPG companies are starting to see shifts in loyalty – both in terms of brand names and mode of purchase (in-store versus online). Our latest data reveals that this behavior is age-agnostic. The shift has been underway, but a more pronounced change has occurred over the last 18 months, primarily due to inflation.
That said, consumers have much more information at their disposal than they used to. They are very aware of what a brand does, how it treats employees, etc., and that impacts how they perceive that brand. Even political factors like attitudes towards the war in the Middle East impact purchase behavior. The Bud Light example is another great illustration of how values (or perceived values) translate into purchase behavior and loyalty.”
What should smart companies do to keep their customers brand loyal in light of price increases?
“It starts with knowing your customer in a comprehensive way. Brands need to holistically understand who their customers are beyond basic demographics and psychographics – their values and motivations, lifestyle, what they are willing to spend on, and why. Every consumer has different drivers that impact their purchases. Tailoring individual consumer experience to those segments’ needs is the key to success. Additionally, authenticity is becoming more important to many shoppers, and knowing the beliefs and values of those people can be critical in impacting spending.
Another example is understanding customers’ propensity to be DIY investors or home remodelers rather than high-touch consumers. With today’s technology and data, even first-touch web engagement can be tailored to meet the needs and behaviors of those different segments, and that customization will impact engagement and conversion.”
Do you have any compelling case studies of how you’ve helped clients keep consumers loyal to their brands?
“There are so many stories where better consumer and customer data drives better performance. It’s hard to choose just one! One that comes to mind is a brick-and-mortar and online retailer looking to expand sales to existing customers. This required that customers consider their brand a go-to for more occasions than before. The retailer appended their CRM with Resonate data, including preferences, behaviors, and life stages. Resonate data is continuously updated, which provides the retailer with the most up-to-date understanding of which customers are experiencing certain relevant life stages like getting married, buying a new home, or having a child. Resonate data is fully actionable – connected to billions of IDs and available in the marketing ecosystem for media activation – the retailer was able to deliver the right message to the right customer at the right time across channels, resulting in $500 million in sales while reducing data costs by 50 percent.”
What will the future of data analytics and targeting be?
“This is an incredibly exciting time to work in the data and analytics space. Here at Resonate we have already been able to help our Resonate Ignite Platform customers achieve a 90% reduction in time to insights through our AI Insights by rAI solution. We are preparing for a huge launch of AI-powered predictive modeling that will dramatically shift brands’ expectations regarding the cost and timing of propensity models and segmentation. We are also working on several projects involving embeddings that leverage data from our proprietary Resonate Consumer Behavior Foundation model. Solutions like these protect customer privacy while empowering brands to deliver highly personalized experiences virtually immediately and at a fraction of the cost.
A brand can come to Resonate with their consumer data, which can be modeled and applied to scale effective marketing at an unprecedented rate.”
