- Danielle Wightman-Stone |
Post-Brexit price rises will not deter British consumers from buying premium brands, according to new findings from the Centre for Retail Research and Rakuten Marketing.
The research reveals that 61 percent of shoppers said that they will not be discouraged from purchasing premium items if prices rise by up to 10 percent following the triggering of Article 50 next week to leave the European Union.
The report surveyed 1,000 consumers across the UK and found that if prices rose by up to 10 percent only 6 percent of Brits would refuse to buy the item, however, if prices increased by 15 percent it would make 21 percent of shoppers switch products.
Despite the positive outlook from the survey, the research also revealed that attitudes to spending on premium brands over the coming months is polarised, with 37 percent of people ‘very’ or ‘quite sure’ they will be better off while 40 percent believe they will be ‘worse off’ or ‘not better off’.
When it comes to foreign-produced premium brands, 29 percent expect there could be reduced spending, and a further 10 percent expect a large reduction in spending on these products. Only 16 percent expect to spend more.
In addition, 38 percent think that Brexit will make no difference to consumers’ trust in premium brands produced outside the UK, but a third think there will be a ’large‘ or ’some‘ loss of trust. This is largest for handbag, casual apparel, and formal clothing brands but lowest for laptops, tablets, and smartphones.
61 percent of British shoppers will not be deterred from premium purchases by Brexit price rises
Mark Haviland, EVP global development at Rakuten Marketing said: “Whilst sentiment suggests that people will still purchase premium products if prices rise slightly, the viewpoints on what Brexit will do to spending on these brands overall is completely polarised. The customer segments marketers target are likely to be completely split in how they approach shopping over the next few years.
“Whether audiences are cautious or optimistic about the effects of the decision to leave the EU, retailers need to make use of data and programmatic targeting to engage these different groups in the way that is most relevant to them. Our findings make it clear that marketers must work hard to understand their customers better if they are to engage customers successfully in this unsettled market.”
Centre for Retail Research director Professor Joshua Bamfield added: “Although there is a clear divide in opinion, negative attitudes about the effects of Brexit outweigh positive ones. However, when we look at consumers’ perception of how well off they will be in six months compared to two years’ time, their outlook is fairly stable suggesting that a crash in consumer confidence may not come.
“Ultimately though, we could see a change in living standards as a result of Brexit and this could affect brand loyalty as well as consumer buying behaviour, and retailers must be prepared for this.”
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