By 
For most people, price remains the primary consideration when making a purchase, whether it’s a house, a car, or even a beer.
For years, the advertising industry has taken pride in its ability to help big-spending clients sell premium products at profitable prices, despite rising marketing costs. This trend seemed to hold even during the recent cost of living crisis, with inflation rates as high as 11% in some countries like the UK. Despite these economic challenges, the world’s major consumer goods companies appeared to remain unaffected, a phenomenon some attributed to “price gouging.”
However, it now seems that the situation is changing. A clear example of this shift is in the alcohol industry, where even the largest brewers are experiencing flat or declining sales. Diageo, a leader in the spirits sector that has long resisted price pressures, is now facing an unprecedented drop in global sales. The company’s CEO, Debra Crew, has acknowledged that this decline could last up to 18 months.
A recent report from purchase intelligence company Cardlytics reveals that UK adults now consider price the most important factor in their purchasing decisions, even though 69% still value brand trust and 59% say they have been loyal to brands for as long as they can remember. However, these numbers are likely to be significantly lower among the younger generation soon entering adulthood.
This shift presents a significant challenge for all businesses, especially at a time when trust in large organizations is possibly at an all-time low. It also questions the prevailing belief that performance marketing, which prioritizes short-term results, is the ultimate strategy in the digital age. Not every company can offer the lowest price, although many, such as supermarkets, claim to do so, further eroding consumer trust.
Successful brands are those that manage to balance quality and value, occasionally benefiting from the public’s emotional attachment, which effective advertising used to foster. However, this emotional connection seems to be diminishing in today’s market.