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Founder and CEO of market research consultancy, Alter Agents; believer that powerful insights can change businesses.
I’ve been thinking, writing and speaking about shopper promiscuity and brand loyalty for years. Over the past decade, our research has proven that brand loyalty is in a permanent steep decline. While this downward trajectory was already well underway before Covid-19 hit, the pandemic has accelerated the process.
In fact, our latest research shows that loyalty can be extremely low depending on the brand category. I wrote about this a few years ago, and the latest statistics show just how fast this paradigm is changing. In our shopper influence study conducted last quarter, loyalty to a brand ranged from a mere 26% (home furniture) up to only 65% (packaged coffee) at the highest levels. This leaves a lot of brand-promiscuous shoppers on the table.
We can also see the difference by generation, as Gen Z starts to come into its own and exercise economic influence. While the boomers can see up to 56% of its members staying loyal to a brand, Gen Z tops out at only 36%. Brands need to pay attention before they start to lose market share with a generation that is said to have a spending power of more than $140 billion — and growing.
Loyalty and the Way People Shop Today
The way people shop has fundamentally changed as people have turned to entirely new purchase journeys during the pandemic that are likely here to stay, at least in part. These behaviors are further complicated by today’s unbound economy, which is training shoppers to be more open to new brands, new disruptions and new possibilities.
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There are several key factors at play in this scenario:
• Consumers expect innovation — that products, services and more are constantly improving to meet their evolving needs.
• Shoppers want universal access to any product, anywhere, at any time with no barriers.
• People, specifically younger generations, are reacting to turbulent times by reprioritizing the way they shop based on personal values and beliefs.
Traditional market research doesn’t take these drastic changes to the consumer mindset into account. Research is still hung up on metrics focused on people’s level of awareness and familiarity of a brand, along with their likelihood to consider that brand and their ability to describe the brand.
You can easily see that the metrics that come out of this kind of research are “brand” focused, not “consumer” focused. We are asking questions that reflect the brand’s priorities, not the shopper’s real experiences and behaviors. But the brands aren’t buying their products. The shoppers are, and brands need to keep track of them, their needs and their ever-changing purchase context instead of trying to pin them down on whether they know about or like a specific brand.
To accomplish that, consider the following for your research:
• Reframe the entire conversation around the shopper’s experience. Understand what motivates them, how they are researching, what information they want and what is most influential in making their final decision.
• Recognize that brands may not enter into the shopping process at the beginning or even in the middle. Shoppers are searching and filtering based on price, reviews and features. Brand can be the last piece of information a shopper considers.
• Try different metrics and methodologies. Brand tracking is a staple of market research, but if you ask the people that have to use the data it renders, it can be really unhelpful. There are alternative methodologies and approaches that yield much more powerful information that promotes real business outcomes if you are willing to let go of the idea of a “funnel.” One approach we’ve used with great results is agile neuroscience, coupled with more traditional quantitative methods, to help predict consumer behavior.
The truth is that we have entered a new reality for brands and market research. Brands and shoppers are having different conversations. When that happens, the information brands use to drive their business decisions ends up leading them astray. To succeed in the future, brands need to acknowledge promiscuous shopping behaviors and start seeing the world from the shopper’s point of view.
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Author: Rebecca Brooks, Forbes Councils Member