The number of uncommitted customers that shop around prioritizing their own needs over brand loyalty is on the rise, according to digital marketplace Upside, Washington.
This type of customer, along with negative consumer sentiment about the economy, are just some of the headwinds facing retailers, including convenience stores, according to Upside’s 2024 Consumer Spend Report.
“Every day we work to deeply understand what retailers and consumers really need, so we can make brick and mortar commerce work better for all of us," said Alex Kinnier, Upside co-founder and CEO.
The inaugural spend report sheds light on important shifts that can help retailers make better business decisions, and the rise of the uncommitted customer is chief among them, Kinnier said.
“When we think about our own buying behavior, I think we'll find that ‘the uncommitted customer’ is most of us,” he said. “And retailers are now grappling with that reality.”
The report is based on research that includes the analysis of 1.1 billion transactions from more than 8,000 retail partners and two national surveys of 3,700 American consumers.
Zeroing in on fuel and convenience-store operators, channel blending is accelerating competition, the report said.
“It’s not just other stations that retailers have to worry about; dollar stores and grocery stores also present formidable challenges,” the report said. “That’s made clear by the 19% decrease in inflation-adjusted c-store revenue per site from January 2021 to January 2024.”
Other key findings include:
- Despite a cooling inflation rate, 56% of surveyed consumers perceive the economy as worse than the previous year. This sentiment is reflected in their budgeting behaviors, with 89% of respondents relying on coupons or promotions to control spending. Younger consumers (18-24) and larger households expressed the most pessimism with their own financial situation.
- Consumers are cross-shopping more than ever, with 81% of grocery shoppers comparing prices across stores and a significant portion belonging to multiple loyalty programs.
- Grocery stores have experienced a 3% decrease in inflation-adjusted revenue per transaction year-over-year, with restaurants and convenience stores facing similar challenges with even larger impacts.
- Loyalty programs remain a critical strategy for retailers, with over 90% of consumers considering loyalty rewards when choosing where to shop; however, the report highlights a disconnect between loyalty membership and loyal behavior.
- Although more consumers are aware of dynamic pricing, widespread adoption remains limited due to mixed consumer sentiment and potential media scrutiny. Alternatively, personalized promotions are viewed more favorably, with 45% of respondents preferring retailers that offer tailored discounts.
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