What weighs more when buying: habit or price? For many Australians, shopping used to be second nature — heading to the same supermarket, grabbing the same coffee brand, and staying loyal to a handful of retailers without much thought.
But inflation has changed the rules of the game. Now, customers compare more, look for discounts, and don’t hesitate to change stores if they find a better deal.
According to a study by Shopfully, 62% of Aussies are cutting back on non-essential spending, with nearly half (46%) prioritising products that are discounted or on promotion. This makes it clear that retail loyalty is not what it used to be. Faced with this reality, retailers have a complex dilemma: how to retain customers in a market where loyalty seems to be increasingly volatile?
From Loyal Customer to Opportunistic Buyer
Until recently, retailers trusted that proximity, habit, or a good loyalty card were enough to retain customers. But today, loyalty is earned day by day, purchase by purchase. It is not enough to have a good points program or a membership card: the consumer demands competitive prices, relevant promotions, and a frictionless shopping experience.
For example, today we see that 84% of Australians research products online before heading in-store. This means that visibility and omnichannel presence can play a role as important as price. A consumer who has seen a brand online, who has received a personalised offer, or who has had a good shopping experience, will be more likely to repeat. The challenge for retailers is not just to compete on price, but to understand what else they can do to keep their customers coming back again and again.
Strategies to Retain Customers Without Entering the Price War
Not all retailers can compete solely with low prices, but they can optimise their promotions to be more effective. The key is to digitise, personalise, and deliver them to the right consumer at the right time.
1. Offer Personalisation: Data Is Key
Sending a generic coupon no longer works. Consumers expect offers to be relevant to them, and technology makes it possible. Some supermarkets already send personalised discounts based on purchase history, increasing conversion without having to lower prices on products the customer would not buy.
2. Own Brands: From Cheap Option to Trusted Choice
The rise of store-brands products in Australia has been unstoppable. A recent Shopfully survey conducted with YouGov revealed that 95% of Australians are open to purchasing store-brand products when grocery shopping, private-label brands have come to be the “low cost” alternative to become a quality and trusted option. While affordability remains to be the key driver (68%), shifting perceptions around quality, healthier alternatives and sustainability are also influencing this growing preference. In fact, 63% of consumers say they would choose a private-label brand if the quality matches a competitor product, while 43% would switch if the taste is superior to other well-known options. For retailers, this shift provides a strategic opportunity. By enhancing the quality and appeal of their own-brand, they become more than a cost-saving alternative, allowing retailers to build loyalty and help retain customers without engaging in a race based on the cheapest option.
3. Digitisation: Price Is Important, But So Is Experience
The consumer is looking for low prices, yes, but also comfort, speed, and convenience. Retailers that have integrated technology to improve the shopping experience —from apps that allow scanning products without going through the checkout, to digital loyalty programs with exclusive benefits— have managed to retain customers beyond price.
A crucial insight for retailers is that 84% of Australians research products online before heading in-store, which reinforces the idea that while the final conversion might happen in-store, the purchase journey starts way before stepping foot inside the store. This suggests that retailers must establish a consistent and compelling presence across all digital touch points to build customer loyalty.
4. Transparency and Sustainability: Factors That Build Loyalty
Although price remains decisive, today’s consumer also values ethics and sustainability. In a context where the shopping basket price continues to rise, retailers who know how to communicate their commitment to local production, waste reduction, or the sustainability of their supply chain have successfully managed to build customer loyalty.
Smart Loyalty in Times of Inflation
Many retailers fall into the trap of thinking that the only way to retain customers is by lowering prices. But the key is not to reduce margins, but to provide value strategically.
Chains that have managed to maintain their customer base have understood that loyalty is not about offering more discounts but about improving the relevance and accessibility of offers. Personalising communication with each consumer, facilitating the search for information on products and prices, and integrating the digital experience with in-store purchases have become decisive factors for retaining customers. Because yes, price is important, but the difference between a returning customer and one who doesn’t come back is not only in the final ticket, but in the experience they have before, during, and after their purchase.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
