Some 58% of consumers around the world report having modified their buying behavior when it comes to their favorite brands, finds McKinsey in a survey of more than 22,000 consumers. The results indicate that consumers are remaining loyal to their favorite brands, but are finding ways to purchase them at lower prices.
Among those who changed their buying behavior, the most common change was to buy the preferred brand but at stores with lower prices (30%). This strategy was most popular among respondents in South Africa (41%), Mexico and South America (40%) and Eastern Europe (36%).
The next-most common change in preferred brand-buying behavior was to buy the brand but in lower quantities, with this the primary change for 23% of those who modified their purchase behaviors. This tactics was most commonly adopted by respondents in Eastern Europe (29%), mainland China (28%) and developed countries in Asia (27%), which include Australia, Japan, South Korea and Taiwan.
Close behind, 22% of those who modified their preferred brand-buying said that they bought their preferred brand but only when on sale or with a coupon. This was the leading change among North American respondents (US and Canada), with 31% reporting this modification.
In sum, roughly three-quarters of consumers who changed the way they bought their favorite brands remained loyal but bought at lower prices or in lesser quantities. Interestingly, the remaining respondents were almost as likely to trade up to a more expensive brand as they were to trade down to a less expensive one. Those who did trade down, though, were happy with the decision, with 69% plan to stick with the less-expensive option.
The changes in behavior are interesting in light of respondents’ financial insecurities. For example, around the world consumers were more likely to say they are worried about job less in the next year (53%) than to be optimistic about their household finances (33%). Moreover, more than one-quarter of respondents are finding it harder than last year to make ends meet (28%) and are living paycheck to paycheck (26%).
Given an extra 10% of income, consumers said they would spend around one-third of the extra money. Most would spend on everyday necessities, but many also on clothes and vacations, as well as entertainment and electronics.
About the Data: McKinsey describes its methodology as follows:
“The online survey was in the field from September 3 to 27, 2015, and garnered responses from at least 1,000 consumers in each of 21 countries, plus another 1,000 consumers across the Middle East and 250 consumers in Taiwan. Because the survey was administered online, the sample largely reflects the characteristics of the typical online population—younger, urban, and more affluent.
For the purposes of our analysis, we grouped the countries as follows: North America (Canada and the United States), Mexico and South America (Brazil, Colombia, and Peru), Western Europe (France, Germany, Italy, and the United Kingdom), Eastern Europe (Poland and Russia), the Middle East (Kuwait, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates), South Africa, and Asia–Pacific. We further divided Asia–Pacific into three subregions: developed Asia (Australia, Japan, South Korea, and Taiwan), Mainland China, and “other Asia” (India, Indonesia, and Thailand).
The country results are weighted by age based on census data and weighted by income based on panel data. The category-specific results are weighted by purchase incidence. The weighting of region- and country-specific data aligns with the procedures used by the McKinsey Global Institute. In particular, responses to survey questions on consumer confidence are weighted according to the size of the consuming class; responses to questions on consumer behavior are weighted according to both the size and per capita consumption of the consuming class.”