A Nation Of Floozies

A Nation Of Floozies

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Ehrenberg-Bass’ Byron Sharp taught us all to give up on loyalty to grow a brand, but new research from Nielsen has revealed just how promiscuous we are when it comes to shopping around with brands.

The study of more than 30,000 consumers by Nielsen reveals brand loyalty is dead. Globally, as much as 92 per cent are ‘playing the field’ when it comes to choosing retail products, and that number is only slightly lower in Australia at 87 per cent.

Yet few marketers have made adjustments to their marketing initiatives or innovation pipeline and continue to throw money against marketing efforts aimed at holding or growing loyalty without a clear benefit proposal. For brand marketers and advertisers, the implication is significant. If you are one of those marketers who has always relied on the 80/20 rule as a benchmark for sales success, then you can no longer expect 20 per cent of your portfolio to drive 80 per cent of sales.

Brand disloyalty is being driven by numerous factors, including the Amazon effect, convenience, and social media. In Australia, the key influencers are the newness factor, value for money, wider availability of products, and changes in shopping behaviour amongst younger consumers.

Shiny new things

Nielsen’s research reveals consumers are actively on the lookout for new brands. Where tried and true used to be the mantra, a quarter (26 per cent) of Australian consumers say they love trying new things and nearly two-thirds (61 per cent) of consumers – while preferring to stick with what they know – can be moved to experiment.

The love of a bargain

Price sensitivity is a key driver, but less important than perceived value. Nearly a third (29 per cent) of Australians single out value for money as the single most important factor influencing their choice of brand, followed by a price reduction or promotion (21 per cent). This proved true across the globe, with better value for money being the number one influencer (38 per cent) amongst consumers.

Key questions around this found 29 per cent would always would switch for better value for money, 43 per cent often would switch, 24 per cent would sometimes switch, while only four per cent would never switch.

So many dance partners

Consumers also have access to a larger product repertoire than ever before. Compared to five years ago, 39 per cent of Aussies say they are more likely to try new or different brands. Nielsen calls these consumers “active explorers” – those who frequently purchase new brands. A further quarter (24 per cent) of consumers are reviewing products across broader ranges, but generally prefer to stay with what they know. This group of “conscious considerers” are important because it will take more to convince them to change even though they aren’t afraid to try brands they’re not familiar with. Marketers can move their decisions to force disloyalty if their current brands haven’t given them compelling reasons, conditions or characteristics to stay.

The sweeter the treat

Nielsen further researched the product categories to investigate which products consumers are more likely to switch. In Australia, the highest product categories consumers are disloyal to are chocolates and biscuits (48 per cent), dairy products (45 per cent) and shampoos and hair conditioners (44 per cent).

The three product categories where customers are less likely to switch are:

  • Baby products – food, nappies and wipes – 18 per cent
  • Sanitary products – 31 per cent
  • Paper products – 33 per cent

What’s staggering here is the high percentage figures. Nearly half of Australians will change their favourite bar of chocolate or biscuit. At the lower end, the figures are still relatively high with a third of customers willing to switch.

How to look good

The race among brand retailers to remain relevant in a flooded market will continue. Amid the growing product repertoires, consumers are more careful about those they are associated with, while ready to walk away from brands that do not resonate with their lives and ideals.

What is also fundamentally evident  is that many consumers are less strongly bound to familiar brands, which means brand halo effects risk losing even more power over time. This is good news for new, unknown brands, but a signal to the well-known, heritage brands that the trust ties are loosening.

It’s critical for brands and retailers alike to identify the tendencies of the fast and fickle consumers in order to better understand what these consumers prioritise. From there, marketers can readjust their marketing strategies to boost – or more likely recapture – retention.

Nielsen has developed eight recommendations for how brands can tackle brand disloyalty. These are:

  1. Identify how consumers rank and stack attraction attributes.
  2. Provide frequent, relevant refreshes and new, unique choices.
  3. Retention, extension and innovation propositions must be compelling to both committed and new customers.
  1. Quantify how product properties outweigh pure price offerings.
  2. Define your brand’s relevance in the context of solving consumers’ needs.
  3. Leverage local origin, sourcing and taste preferences as an advantage in relevant categories and countries.
  4. Combine omnichannel information discovery with seamless digital connections
    to purchase.
  5. Open your brand to social engagement and interaction and invite feedback.



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