With inflation currently at 22.41 percent, and food prices rising to 24.82 percent according to the Central Bank of Nigeria (CBN), most shoppers now prioritize affordability over brand loyalty as dwindling purchasing power influences buying decisions, especially for sectors with competing brands.
Obviously, brands in the Fast-Moving Consumers Goods (FMCG) sector, such as cereal, noodles, dairy, and carbonated soft drinks brands, are among the several products that consumers have to rationalize in terms of the impact on the household budget before making a purchase.
While a research by Zendesk, a digital company, revealed that 88 percent of consumers say it takes three or more purchases to build brand loyalty, it disclosed that price is the top factor keeping customers loyal to their favorite brands.
Checks by LEADERSHIP revealed that, over the last two weeks following the removal of fuel subsidy, the cost of food items has more than doubled, resulting in low consumption and prioritization of scarce resources and available disposable income.
It was observed in some shopping outlets in Lagos that shoppers were more price-conscious, often checking the price tags and confirming the same from sales representatives. Usually, they go for alternatives with lower cost.
Sylvester Alibor, a regular shopper at the Lagos City Mall, confirmed that his monthly shopping list has been drastically reduced as a result of the prevailing economic realities.
He revealed that, while his family has been lovers of some notable cereal and dairy brands, he had to take the tough decision to adopt another brand that was less expensive to maintain the nutritional requirement for her family.
“Since I cannot cut out milk from my kids’ diet, I had to try another brand. So far, I think this new brand serves me well. It is tough to make these decisions really but as a woman, I have to make the most important choice to manage the little money available, the best possible way I can,” she added.
Mrs. Bolanle Adeyemo, a mother of four, believes that price consciousness is the best way to mitigate the impact of inflation on her household budget. To her, a review of the family expenses, especially food purchases, is critical to the survival of her family.
“It is unwise to spend recklessly now. I go for the essentials right now. Even the basic foodstuff I buy, I go for the best prices. Frankly, I cannot remember when last, I looked at a brand name before making a buying decision. For me, it is the cost. To run a family as large as mine in Nigeria today, requires deep thinking and smarter choices with regards to expenses,” she pointed out.
Another shopper who spoke on condition of anonymity said: “Since my kids cannot do without cereal and milk, I had to adopt a more affordable brand. For example, I used to be a great lover of peak milk. It is either Peak milk or nothing else, but since the increase in prices, I have changed to another brand”.
According to Zendesk, as competition gets fiercer and economic uncertainty becomes predominant in the marketplace, understanding the link between loyalty and how you serve your customers throughout the entire customer experience is critical. Price, it stated, plays a fundamental part of decision making given the current economic realities.