understand and embrace the changes in brand loyalty
For some time now, there have been reports suggesting the death of brand loyalty. To borrow from the words of Dylan Thomas, reports of this death are exaggerated. That said, there are changes afoot.
US research, has consistently identified high levels of brand loyalty among consumers of all ages and backgrounds. One study found that 82% of American consumers are loyal to a product brand. This same research found, however, that 84% of Americans are now loyal to a retail brand.
In other words, Americans, like Australians as it happens, are becoming increasingly connected to, and therefore loyal to, retail brands – the brands that tell them which products to buy. This is not surprising given the growth in home brand products being sold by Coles, Woolworths, Myer, David Jones, Amazon and many other retailers. The power is now firmly, and increasingly, with retailers.
NYU marketing Professor, Scott Galloway, predicts that within 5 or so years, there will be only two powerful categories of ‘brand’ in the retail sector:
• Luxury brands – Apple, LV, Prada, and the like
• Retail brands – Amazon, Alibaba, and the like
There is an increasing body of evidence to suggest that he is right, and the likes of Jeff Bezos are investing a great deal of money into making this prophesy a reality.
This, in part, explains the growth in vertically integrated businesses such as Zara, Ikea, and Apple. Consumers are loyal to the retailers as much, and possibly more, than the manufacturer, which, in these cases, happens to be the same business.
And if you still think brand loyalty is in decline, here is the result of another US study – 78% of consumers report that they are reacting loyalty at a faster pace than three years ago. There is evidence to suggest that brand loyalty is in fact increasing.
Understand and embrace the changes in brand loyalty
Sources of core statistics – HBR, ACCES, CONSUMER TERMOMETER, ACCENTURE, ICSC, CMO
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D. John Carlson – Adviser and Speaker – 0402 273 350 or firstname.lastname@example.org .