- November 2, 2011

The Effects of the Recession on Brand Loyalty and “Buy Down”

Although the U.S. recession may have technically ended in 2009, its lingering effects are still very much being felt by Americans. As high unemployment levels and rising prices endure, consumers have been pressured to spend less and save more, ultimately affecting brand purchasing behavior and market share. A more price-conscious orientation among consumers has resulted in an increase in the “buy down” phenomenon, when consumers buy less expensive (often private label) brands in order to reduce household expenses and save money.

This paper analyzes the progressing trends in buy down behavior within CPG and other product categories since the recession first began in 2008. Key questions to be answered in this report include:

  • To what degree has buying down impacted the various product categories analyzed? Which product categories have been hit the hardest?
  • What are the different ways consumers can “buy down”?
  • How do consumers who exhibit buy down behavior search for the best price?
  • How can brands combat buy down behavior and position themselves for a rebound once the market recovers?

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