The world’s consumers are ‘playing the field’
Dubai, UAE, June 19: 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 favourite brands, according to a global consumer study conducted by global measurement company, Nielsen.
Nielsen’s Global Consumer Loyalty 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. A significant 42% of global consumers say they love trying new things and nearly a further half (49%) of consumers – whilst preferring to stick with what they know – can be moved to experiment. See Infographic.
Asia Pacific consumers have the highest brand-switching propensity, with 47% willing to switch brands or try different products, closely followed by Africa and the Middle East (45%) and Latin America (42%). Consumers in North America and Europe are somewhat less likely to switch brands (36% and 33% respectively).
“With the overwhelming majority of consumers actively or passively open to unfaithful actions, the risks for brand owners have never been greater,” said Joe Ellis, Senior Vice President, Nielsen Consumer Insights. He attributed part of it to the so-called Amazon effect that expands choice and enables price awareness, but said it’s more than that. “It’s WeChat groups in China on the hunt for deals or even brokering deals. It’s unbranded fresh food, delivered to the door in the UK at prices that go head-to-head with supermarkets. And it’s traditional grocery retailers trying to find ways to retain profitability levels in a world where home delivery undermines margins.”
Globally, 39% of consumers single out value for money as the key factor influencing their choice of brand, followed by enhanced or superior quality (34%), price (32%) and convenience (31%). Meanwhile, only 28% of consumers are influenced by the fact that a brand is well known and trusted.
At a regional level value for money stands out as the key influencer of brand choice in Africa and the Middle East (44%), North America (38%), Latin America (37%) and Europe (35%). Asia Pacific is the only region where value for money does not rank as the top factor influencing brand purchasing decisions; there, 42% of consumers say enhanced or superior quality is their key consideration, while 40% are influenced by value for money.
Ellis pointed to related implications of not rethinking campaigns that focus on winning or retaining loyal customers. “The drag effect of consumer demand for choice and voting with their wallets will overwhelm existing marketing and product development efforts if brands don’t more aggressively address disloyalty in the marketplace.”
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, compared to five years ago. In the developed markets of North America, Asia-Pacific and Western Europe one-third of consumers love new, as opportunities to be distracted and disloyal have been around for much longer due to long-standing presence of online and physical retail stores, offering well-stocked shelves and multiple product choices and price points.
On the flipside, a larger proportion of consumers (closer to half) in developing markets of Asia Pacific (50%), Latin America (49%) and Africa and Middle East (42%), are enthralled with new products demonstrating increase in brand-switching, given that historically retail and product assortment in these markets have been informal and limited, with only two or three product options on shelf per category.
A further multiplier to the equation is that nearly a quarter (24%) of global consumers are reviewing products across broader ranges than ever. “We call this group “conscious considerers” and they’re important because, even though they are choosing more widely than ever across brands, they tell us 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,” Ellis said.