The Dynamic Pricing Debacle: Decoding the Rise of Value-Conscious Consumers

Wendy’s recently became the latest victim of a huge social media backlash when word spread like wildfire that the fast-food chain would experiment with surge pricing, like Uber. Customers were furious, taking to their favorite platforms to decry Wendy’s for, among other things, raising prices. It didn’t matter that the actual quote from the company’s CEO said Wendy’s would experiment with “dynamic pricing,” not surge pricing. The fast-food chain was dragged through the proverbial social media mud, and the incident even made the news headlines for a few days.

Why did consumers react so poorly to Wendy’s announcement?

Clues to the backlash can be found in data from our recent State of the Consumer and Recent Events reports that reveal Americans are more concerned about money than ever. The latter report reflected an increase in anxiety among Americans in general and specifically pointed to the economy as a source of concern for consumers in particular. According to the report, in fact, worries about the economy “to a large extent” surged by 30% in January 2024.

The State of the Consumer Report takes a deep dive into a specific segment of value conscious consumers for which affordability is an important factor in their decision-making process and trust being one of their top personal drivers. This segment doesn’t like feeling price gouged, which was how Wendy’s decision about dynamic pricing was misreported to consumers by the media.

The takeaway for brands and agencies

Representing 112M people, our data signals “value-conscious consumers” are characterized by their budget-conscious shopping behavior, financial awareness and adaptability to price changes. They prioritize cost-effectiveness, quality and practicality in their purchases, adjusting their shopping habits in response to price fluctuations and product shortages. They are influenced by traditional shopping preferences and value online privacy and affordability. Ultimately, this group tends to make independent decisions regarding their purchases, prioritizing practicality and reliability in their buying choices, so it is not a surprise that they may have felt an aversion to a pricing tactic that they perceived to be both beyond their control and unpredictable.

Going beyond demographics to understand the intentions and preferences of millions of American consumers can shed light on the why behind the major backlash to Wendy’s announcement, which will, in turn, help brands ignite more effective communication with their high-value audiences. Resonate is the leading partner for agencies and brands who are looking to make smart decisions by leveraging the most predictive, recent and comprehensive AI-powered data to provide the in-depth information necessary to target and engage consumers. To learn more about consumers in 2024, read our State of the Consumer Report and our Recent Events Report. To learn more about how Resonate can help you fill in data gaps to drive growth across the customer lifecycle, schedule time with a data expert today.

Categorized as: Agency, Brand

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