As inflation and supply chain challenges cause prices to increase, consumers are coping by shifting their shopping habits. For many shoppers, bargain shopping is a clear solution because it allows them to save money without having to cut their purchasing significantly.  

As retailers work to meet consumers' needs, they face the challenge of offering compelling discounts without eroding their bottom line. For businesses, this shift poses both a challenge and an opportunity: adapt to the new consumer mindset or risk losing money and market share. However, there are a variety of ways to attract price-sensitive customers while also building brand identity—including loyalty programs, strategic promotions and intentionally-designed customer experiences—that draw in-store traffic and provide a competitive advantage.

Inflation’s impact on consumer spending patterns

Rising costs are reshaping consumer behavior. While previously, shoppers may have made purchasing decisions primarily on the factors of perceived quality or store proximity, many of them have become increasingly focused on cost-saving tactics and seeking out the best deals available.

• ‍57% are actively shopping where they can find the best deals—a 23% increase from the previous year.
• ‍54% of consumers expect grocery prices to continue increasing.
• ‍51% want exclusive discounts tied to their loyalty.
• ‍93% of U.S. consumers would make repeat purchases from brands offering good discounts.
• ‍48% avoid brands that don’t offer deals.
• ‍33% used more coupons in grocery stores in 2024 than in 2023.

These numbers paint a clear picture: consumers are reacting to inflation by changing their approach to spending. These behavioral shifts make it more likely that these behaviors will continue even after inflation eases. Customers may feel a newfound pride in finding a deal or being rewarded with a personalized coupon, leading to longer-term loyalty to businesses that offer them a combination of value and a positive experience. For example, as consumers are reallocating their budget, they’re shifting away from eating out to spending more in grocery stores. A Yale study found that consumers would rather buy a more expensive, higher quality fish at a grocery store than spend $20 on a restaurant meal. Consumers are shifting from convenience to value-driven quality.

This behavioral shift points to the need for businesses to rethink their strategies. Savvy consumers are taking their business to the brands who offer them exclusive deals, personalized experiences and unique incentives.  

Cross-industry loyalty trends

One way that retailers can attract customers is through creating loyalty programs. With the promise of individualized deals, shoppers seek out savings one membership at a time. These programs often offer tiered rewards, special partnerships with other brands and timely messages to remind consumers of upcoming savings. Loyalty is no longer an individual marketing initiative but has become an essential part of the customer's journey. Loyalty programs should be backed by data to meet consumer needs and preferences effectively. By analyzing purchasing patterns, engagement metrics and feedback, retailers can customize their loyalty programs to deliver personalized experiences and tangible value to consumers, ultimately driving customer retention and satisfaction.

Retail and grocery

Across retail and grocery stores, consumers value personalized deals and rewards more than ever. A senior McKinsey partner explains that, to market to consumers, it’s important to “use Gen AI to create and scale highly relevant messages with bespoke tone, imagery, copy, and experiences at high volume and speed.” It is not enough to have a membership program; consumers want targeted sales and deals that are tailored to their specific shopping habits. These programs go beyond points to build trust and long-term engagement.

Fuel and convenience

With gas prices varying by the day, consumers want their money to stretch when they go to the pump. Based on our findings in our Commerce Experience Report, 54% of consumers are rewards members at convenience stores. But consumers are choosing gas stations based off more than just price. They're selecting their gas based off rewards such as cents off per gallon or product rewards inside convenience stores.

Psychology of bargain hunting

Emotional drivers

Bargain shopping isn’t just a financial decision—it’s an emotional one. The act of finding a deal provides a sense of control and satisfaction, especially during times of economic uncertainty.  Chasing a deal also increases a sense of urgency in shoppers. Bargain hunters feel pressure to act fast or lose their opportunity to save money. Consumers feel empowered when they believe they have “won” at shopping.

Experiential drivers

Bargain shopping can also be linked to better brand experiences. While some businesses fear that lowering prices may decrease value perception, other brands are offering unique experiences to show their value in other ways. An article by The Shelby Report mentions that consumers who smell freshly baked goods as they shop experience more positive emotions, which leads to impulse purchases. Experiences such as fresh bakery sections, shopping carts that promote family-friendly and accessible shopping experiences and free samples can improve value and experience perception while keeping costs friendly for consumers.  

Offering newspaper or magazine coupons for discounts is no longer sufficient to remain competitive in today’s market.  Stores must incorporate more digital and personalized experiences and connections throughout the purchase and post-purchase journey to thrive. This includes offering AI-powered personalization to tailor offers to individuals, as well as creating more interactive and engaging in-store experiences.  

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How to win

Bargain shopping due to inflation is not just a temporary phase; it is a shift in consumer habits and behavior. Consumers are more intentional and price-conscious when it comes to shopping. An article by Forbes found that “faster-growing companies experience 40% more revenue due to personalization implementation.” Additionally, customers feel more cared for when their experience is personalized, resulting in greater customer loyalty.  According to PWC, 65% of U.S. consumers find a positive experience with a brand more influential than great advertising.  

Considering these facts, it is clear that creating better customer experiences goes beyond having competitive prices. Customer satisfaction requires retailers to invest in the larger shopping experience. With better technology that can track consumer spending habits and create a more personalized experience, retailers can stand out against their competitors and draw in the highly sought loyalty crowd.

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