Consumer brand loyalty still falling

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By: Wise Marketer Staff |

Posted on May 13, 2010

Consumer brand loyalty still falling

There has been a significant decline in consumers' allegiance to their favourite brands during the past two years, according to a ComScore study of brand loyalty to consumer goods  products.

The study evaluated the change in brand loyalty within a number of consumer goods categories, including health & beauty aids, OTC (over-the-counter) medications, apparel, food, household products and housewares.

As the economic downturn has continued, the percentage of shoppers who typically buy the brands they want most has steadily declined across the categories examined. In March 2010, less than 50% of shoppers reported purchasing the brand they want most.

In some categories, particularly CPG household products and housewares, consumers were already more likely to buy a brand they didn't "want most" at the start of the recession. Some categories (e.g., paper towels, facial tissue) have not seen increased trading down from a brand perspective, possibly because such categories have led the way in tiering, allowing consumers to stick with their preferred brand at a more attractive price point.

As the economic downturn has persisted, this trading down behaviour appears to be spreading to categories that were previously immune (e.g. HBA and OTC). The increases in trading down in these categories have largely occurred in the past year. Higher ticket items have seen large increases in trading down, possibly due to larger absolute savings on a single purchase.

As part of the study, consumers were also asked about the type of brand they did buy when not their preferred one, with a focus on the importance of promotional discounts and lower price in causing the shift. For most categories, the drop in likelihood to shop for the brand wanted most is not restricted to buying other brands on sale. Rather, a sizeable percentage of the change in shopping approach is being driven by a decision to convert to less expensive brands to save money.

According to comScore chairman Gian Fulgoni, "Despite these shifting consumer dynamics, research has repeatedly shown that premium brands which invest in marketing and promotion activities aimed at maintaining buying at 'preferred' levels are able to minimize short-term erosion of share to less expensive brands and position themselves for a bounce-back when the economy improves."

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