3 evolving trends in brand loyalty
Are you ready for the new era of brand loyalty? Our latest research report decodes shifting customer attitudes and behaviors to help brands build better relationships.
Years of economic and product disruptions are driving a shift in brand loyalty attitudes and behaviors among grocery shoppers. Tightening budgets and empty shelves have made shoppers more willing to try new brands they might not have considered before. As a result, one might think brand loyalty is on the decline. But in fact, the opposite is true: 84.51°’s latest research on shoppers’ brand loyalty attitudes and behaviors shows that a higher percentage of customers say loyalty is actually on the rise.
1. Customer definitions of brand loyalty have changed
In our recent customer loyalty study, 84.51° asked consumers about their actions and attitudes toward brand loyalty, and what consumer packaged goods (CPG) companies can do to earn it. Our research found that while shopper perceptions of brand loyalty have changed and there’s is no consensus on its definition, in most shoppers’ minds it has shifted away from exclusivity.
One key shift is that shopper loyalty does not guarantee brand purchases. Nearly half (43%) of respondents perceived brand loyalty to be based on preference; more than 30% defined it based on their purchase behavior and 24% defined it based on consideration.
In addition, brand loyalty does not always equal exclusivity. To a majority of shoppers, it means buying a brand “most often” while being open to purchasing other brands. Only 5% of respondents defined loyalty to a particular grocery and household use item as buying “that brand and nothing else.” But more than one out of four (26%) said they have a “preferred” brand but are willing to try something else. The same can be said for retailer loyalty: Just 6% of shoppers defined retailer loyalty as shopping at one retailer for all their needs, while 29% described it as a retailer where they shop “most often.”
These shifting perceptions mean brands and retailers cannot become complacent; they need to continuously earn shopper dedication. But they also present an opportunity for brands to reimagine their approach to loyalty to meet these new customer expectations and strengthen their relationships with shoppers.
2. Customer expectations and values have shifted
Our research also uncovered changes in customer expectations that have altered the dynamics of brand loyalty to different categories. While shoppers are motivated by price, it isn’t the only thing that would boost their loyalty — brand trust and value are also important.
Shoppers across the economic spectrum are looking for opportunities to stretch their budgets. Pinched by high prices, 62% of shoppers said getting a “good value” for their money is important when it comes to selecting a brand over competitors. The second most important quality is trust; 34% said they choose brands that they trust.
But while shoppers prioritize these factors when choosing what to buy, the importance of those factors can vary significantly between age groups. For example, offering free items was a top loyalty driver for shoppers ages 35-44, but brands must deliver on their promise to be in the consideration set for 55-64-year-olds. And shoppers ages 65 and older were most concerned that a brand is a good value for the money.
If trust in a brand is high, the perceived brand value increases. But the opposite is also true — brands with zero trust have zero value to shoppers. To earn shopper trust, brands can utilize product performance claims testing or product usage testing to ensure product performance meets shopper expectations. And to build and fortify trust in their brand value, CPGs can better meet shoppers’ needs by providing personalized content or offers that reach them at key moments, offering more information about products, and highlighting the key product elements shoppers value most.
3. The brand-customer relationship has evolved
Today’s customers expect brands to be thoughtful about the interactions they initiate with them. A brand’s efforts to engage the customer will be perceived as self-serving if the customer feels like a target, not a person. As a result, even brands that enjoy a high level of loyalty need to give customers reasons to remain faithful.
Customers are looking for authenticity in brands — and finding it can be the foundation of a strong relationship moving forward. This dynamic also translates into an increased demand for understanding and personalization.
It’s important to analyze shopper motivations, attitudes and preferences to identify what matters most to them. With that understanding, brands can acknowledge and thank customers for their loyalty in ways that are meaningful to them — such as relevant brand offerings and savings on their preferred brands.
Customers also want brands that not only deliver the promised functions but also make them feel good about their purchase. Brands can respond by helping customers make more educated decisions about the products they use. For instance, with the importance of health, wellness and sustainability, brands have an opportunity to share more about the corporate priorities, initiatives, sourcing and innovations that are helping to create products that will help shoppers lead better lives.
And although customers want choices, offering a multitude of sizes, selections, flavors and alternatives can also lead to increased uncertainty. People want options but they don’t want to struggle to make a choice, so brands can make it easier for them by taking the complexity out of choosing with personalized recommendations.
Discover more about brand loyalty trends
As customers’ loyalty priorities continue to shift, they’re looking for brands and retailers to provide value, trust and relevancy. To better understand how to meet those needs, read our new white paper, “The loyalty shift decoded: Key insights for winning customer devotion in an uncertain economy."
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