There once was a time when mom would insist on using only General Electric appliances, dad would only drive a Buick, and kids would insist on riding a Schwinn. Even when it came to things such as insurance, it was nearly impossible to convince Mr. and Mrs. Smith to switch plans even when a better deal was out there. Regardless of age, consumers wanted a Kleenex not a tissue, a Band-Aid not a bandage and it wasn’t that long ago that we “Tivoed” a TV show, not “DVRed” it. Has brand loyalty gone the way of the CD player?
Assessing the State of Brand Loyalty
According to an Ernst & Young survey of approximately 25,000 people spanning 34 countries, less than 40 percent said that brand loyalty was a factor in their purchasing decision. In the United States, that figure drops to around 25 percent. While many consumers opt for well-known brands for some purchases such as clothing and electronics, many consumers tend to go where the deals are – regardless of who manufactures the product.
Technology and Brand Loyalty
The advent of the smartphone is having an impact on brand loyalty as well. According to survey sponsored by AisleBuyer, 75 percent of those surveyed said that they would consider changing their purchase decision if they were offered a better real-time deal via their smartphone. A study by WSL Strategic Retail on spending trends among the younger generation revealed that 80 percent of millennials put price as their first priority when making a purchase. Approximately 60 percent would bypass their favorite brand if they find the same product cheaper elsewhere.
Social Media Marketing and Brand Identity
When these stats are considered, it just makes sense that retailers are making more efforts to establish their brand via social media. Many retail outlets are offering free apps to customers to notify them of real-time deals in an effort to keep their name out there. The problem with hitting consumers over the head with your brand via social media, however, is that surveys show that people don’t like having blatant ads shoved down their throat while doing what they do online. The key around this is to provide content that is relevant without being an overt sales pitch. It’s too soon to tell whether or not these efforts will reverse the trend.
Economic Conditions and Brand Loyalty
“I’d love a Lamborghini, not ask me what I can afford,” is a familiar refrain for most people in today’s economy. It also sums up how the economy may be hastening the death of brand loyalty. Granted, this isn’t the first time in history that the economy has driven what people can afford. The big difference is that lesser-known brands now have the ability to make their pitch right along side the name brands via social media and smartphones. If young people today get into the habit of choosing the cheaper brand, will they reverse that trend when they get older and have more spending power? It might not be that easy to reverse an established mindset where a deal is more important than loyalty to a manufacturer.
As long as the big guys continue to pour millions into advertising efforts, it’s not likely that brand loyalty is going to disappear completely. Most consumers are still hesitant to try off-brands for large scale purchases such as big screen HDTV, speaker systems and cars. The main difference between now and a few generations ago is that it is a lot easier to dangle a lower price in front of consumer and have them take the bait, so to speak.