The evolution of brand loyalty

Since inflation and other budgetary restrictions are a big concern in the eyes of consumers, retail food stores, as well as manufacturers of consumer packaged goods must be aware of the evolution of brand loyalty. Although these economic challenges may have led to the perception that loyalty is in decrease, the retail data company 84.51deg has found that this isn’t the situation. Instead the Kroger subsidiary’s studies have revealed that the notion of loyalty has changed, and is actually growing.

“In customers’ minds, loyalty no longer means that they are exclusive to one brand or retailer,” explained Becky Eldredge, vice president of commercial loyalty.

What has changed in the way that consumers have embraced loyalty?

The research conducted by 84.51deg discovered that a higher percentage of shoppers identified the term “loyalty” by defining it as “brands and retailers that they buy and shop most often” in comparison the notion of “a brand that they only ever buy” or “shopping at only one retailer for all their grocery and household needs.” This shift in the definition can be attributed to three main reasons that include changing budget requirements as well as consumers getting more used to purchasing a variety of food stores during the coronavirus outbreak and the omnichannel shopping habits. All of these changes in consumer behavior have led consumers to frequently shift between different brands and retailers because of necessity and convenience. While inflationary pressures can be susceptible to change the two other factors are likely to remain the same, and this category should be taken into account.

Although inflation remains a key decision factor for shoppers, more are shifting to private-label grocery brands. A 84.51deg study shows that 53 percent of households are switching their purchases to lower-cost items. This is a major reason for increasing the number of consumers who prefer a retailer’s own brand. Private-label products appeal to shoppers if they can prove to be of the same quality as the national brands, and also the ability to offer a wide range of items and sizes. These qualities can help to earn customer loyalty through providing an excellent value for money and trust in the brand.

“What is important is that brands – CPG brands or private label – are fulfilling the needs of their ever-changing customer,” said Eldredge. “Seek out customer feedback on new product attributes, leverage claims testing or product usage testing to ensure product performance is meeting expectations.”

As CPG retailers and brands cater to the requirements of omnichannel shopping Digital experiences allow customers to spend more time shopping and pick different brands at the one click. But, they also provide an increased opportunity to engage directly with customers and develop loyalty.

“Today, customer expectations continue to rise,” said Eldredge. “Customers expect a consistent experience across multiple channels (coupons, prices, quality of products, and brands offered), options that meet their preferences, to be recognized as loyal customers, and for brands to value their time.”

How do brands keep their customers?

Although many customers are familiar with loyalty programs from retailers however, just 7 percent of online customers across the US have signed up to an CPG loyalty program as per Mary Pilecki, an analyst at the research and advisory firm Forrester. In recent times, many CPG brands have launched different loyalty plans to maintain relationships between their consumers.

General Mills launched its Good Rewards program in conjunction with digital rewards application Fetch. It proved very successful for the company. KC Glaser, General Mills’ director of rewards and loyalty, declaring to Modern Retail that the program “has exceeded expectations” in terms of the number of users who have joined as well as the engagement of buyers and overall number of General Mills brands purchased.

“By offering consumer-centric solutions, we are not only educating the consumer on the power of our portfolio, but we’re also encouraging behavior change and that loyalty, we believe, will translate to higher lifetime value and spend on General Mills products,” Glaser said to SmartBrief last year..

Kroger is also focusing on loyalty with the help of targeted messages. Eldredge revealed how 58% of customers are more likely to buy the brand they prefer or shop at a particular retailer when they receive this kind of information.

“One example of how Kroger has proven this is with its Best Customer Communication (BCC) program, a two-decade-long loyalty program that rewards its best customers with savings on brands that they buy most often,” she said. “This has resulted in incremental sales and trips on brands that customers love at Kroger.”