Insights

The itch to switch drives brand disloyalty in Australia
Article

The itch to switch drives brand disloyalty in Australia

The ‘itch to switch’ has never been greater among Australian consumers. With the overwhelming majority of consumers actively or passively open to switching products, brand owners are increasingly at risk of eroding brand loyalty and declining market share.

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% of your portfolio to drive 80% of sales.

Almost nine-in-10 (87%) of Australians are ‘playing the field when it comes to choosing retail products – just below the benchmark for consumers globally (92%). Nielsen’s recently released Global Consumer Loyalty Survey of more than 30,000 consumers has revealed that brand loyalty is dead.  

only 13.4% of australians are loyal to their favourite brands

Instead, consumers are actively on the lookout for new brands. Where tried and true used to be the mantra, a quarter (26%) of Australian consumers say they love trying new things and more than three-in-five (61%) of consumers – while preferring to stick with what they know – can be moved to experiment. 

Categories that trigger the ‘itch to switch’

In Australia, the highest product categories consumers are disloyal to are: chocolates and biscuits (48%); dairy products (45%); and shampoo and hair conditioner (44%). It’s interesting to note that even at the lower end of the disloyalty spectrum, there is still a sizeable number of consumers willing to switch. The three product categories where customers are less likely to switch are: baby products – food, nappies and wipes (18%); sanitary products (31%); and paper products (31%). 

nielsen-disloyalty-across-categories-australia

Winning the hearts and minds of consumers – Getting A Second Chance

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

What is also fundamentally evident, is that consumers are mostly 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
  4. Quantify how product properties outweigh pure price offerings
  5. Define your brand’s relevance in the context of solving consumers’ needs
  6. Leverage local origin, sourcing and taste preferences as an advantage in relevant categories and countries
  7. Combine omni-channel information discovery with seamless digital connections to purchase
  8. Open your brand to social engagement and interaction and invite feedback