Insights

Consumer disloyalty is the new normal in Indonesia
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Consumer disloyalty is the new normal in Indonesia

consumers are ‘playing the field’

Disloyalty levels are on the rise among the world’s consumers, with just 8% of people considering themselves to be committed loyalists when it comes to their favorite brands, according to findings from Nielsen’s global consumer loyalty study.

Nielsen’s global consumer loyalty study demonstrates that consumers are actively on the lookout for new brands as the gamble of buying new products is de-risked by levers such as rising income levels in developing markets. In Indonesia, more than one-third (38%) of Indonesian consumers say they love trying new things and half (50%) of consumers -whilst preferring to stick with what they know- can be moved to experiment.

In terms of brand switching behavior, 37% of Indonesian consumers said that they tend to have a favorite brand every time they shop, and this behavior is still the same as the way they shop five years ago. Even 59% of Indonesian consumers said mostly buy products manufactured in the country, but they are open to try products manufactured by other countries.

Forty-five percent of Indonesian consumers single out enhanced or superior quality as the key factor influencing their choice of brand, followed by utility/ease of use (41%), better value for money (38%), users/product reviews (33%) and the product from well known, trusted brand (31%).

The competition is heating up across a variety of categories in the marketplace as Indonesian consumers consider the importance of brand names, but still switch across a lot of brands. Chocolate and biscuits (53%) and fruit juice and bread/freshly baked food (47%) are top list for categories where brand switching is more prevalent. Following close household cleaners (43%), and shampoo & hair conditioner (33%).

Overall, consumers’ willingness to try new brands is on the rise: 46% of global consumers say they are more likely to try new brands they have never tried before. On the flipside, 51% Indonesian consumers said that they prefer to stay with those they’ve tried in the past. It will take more to convince these consumers to change, but they still send signals of disloyalty.

What’s Next for Indonesia

Consumer’s intention to try new things (both products and brands) have been existing since long time ago. What makes it different now is the character of marketing communication media that is difficult to be controlled by brand owners. “In the past, marketers had more power to control whatever they want to communicate to consumers. In the social media era today, we never realize how many haters our brands have, as well as how many ‘unofficial’ endorsers support our brands out there, “said Yudi Suryanata Executive Director of Consumer Insight Nielsen Indonesia. Marketers need to  be aware that disloyal consumers do not mean that they dislike their brands, as it happens because other brands offer more attractive proposition. Furthermore, Suryanata explained some points that marketers need to consider. “Value for money is not the same as discounted Price. Brands must be able to build emotional branding, not only promotional program. They must continue to evolve to remain ‘beautiful’ in the eyes of consumers and not to be stuck in past successes. Avoid relying on gimmicks and promotional programs to build consumer loyalty because what a brand needs to survive are brand loyalists, not promotion loyalists.”