American Express finds potential in recession
Impulse buying and brand loyalty are things of the past, according to a study commissioned for Amex and Loyalty One, but consumers are more involved with, and critical of, their purchases than ever before.
Since last year’s recession, Canadians have become far less loyal to brands and will no longer think twice about leaving a company that doesn’t satisfy them, a recently published survey from American Express Canada and Loyalty One has revealed.
According to the study, which included 1,000 Air Miles collectors, 80% of females said they are cutting back on impulse purchases, and 69% of males are doing the same. Budgeting also seems more important than ever before: 74% of consumers said they’re paying closer attention to quality, and 78% said they are paying attention to price.
The study, Canadian Shopping and Spending Attitudes: Lessons Learned from the 2008/2009 Recession, was conducted in February, and although the results were officially published this week, Amex Canada CEO and president Denise Pickett shared her thoughts on the results at a March presentation at the Canadian Marketing Association’s Business of Ideas Forum. The results, she said, are already shaping business strategies at American Express Canada through the reward programs they choose to invest with via Toronto-based Loyalty One.
‘We did this not just to see our way through the short-term, but because we expect this shift in consumer behaviour to be permanent – I repeat, to be permanent,’ she explained.
When it comes to brand loyalty, just 7% of consumers said they would remain loyal to their retailer, 10% to a department store, 12% to airlines, 31% to their grocery stores, 34% to gas stations and 38% to their credit card provider.
Upon realizing that more than half of their customers were ready to jump ship to another credit card that offered better rewards, Amex went into ‘survival mode’ said Pickett. ‘We had to cut back everywhere and quickly. Initiatives were shelved. Targets were reduced. Budgets cut back,’
However, the company also took advantage of the opportunities presented by the recession – namely a less crowded new-product marketplace – by investing in both new rewards cards and a multi-platform national campaign, Realize the Potential.
The recession made consumers highly involved with their purchases, comparing value and price for even the most basic things, and this is something brands should consider when developing their strategies for the future, she explains. ‘We’re placing big bets on a future where consumers are even more quality driven, clarity insistent and service obsessed.’