Brand loyalty on the decrease

Online shopping gives the power to consumers

Ian Williams, vnunet.com 31 Oct 2007

Almost half of all shoppers display no loyalty to a favourite brand if a competitor is running a special offer, according to recent research by business intelligence developer Cognos.

"More than ever, the 21st century shopping experience is being driven by the consumer," said Patricia Waldron, global retail industry director at Cognos.

"Customers have so much choice at their fingertips, and the culture has clearly shifted to looking for the best deal available rather than maintaining brand loyalty."

The research should act as a wake up call for retailers, according to Cognos, because there has never been more pressure to understand what appeals to customers today, and to act on the information faster than the competition.

A further 24 per cent of respondents are unsure whether they would purchase a preferred brand when presented with rival offers, suggesting that they may consider swapping if the offer is sufficiently enticing.

The dramatic increase in online shopping and product comparison websites is the biggest contributing factor to the decrease in brand loyalty, according to the research.

Consumers can now easily compare features and prices, as well as obtain reviews from other customers, without needing to leave their desks.

"Retailers must have accurate information about shopping trends to make the right decisions in a fast moving retail sector where consumer preferences and loyalty changes frequently," explained Waldron.

The survey also revealed that buy-one-get-one-free remains the preferred special offer for 77 per cent of shoppers. Some 81 per cent of women preferred this deal compared to 74 per cent of men.

"Buy-one-get-one-free may be the most popular with shoppers across all age ranges, but it is not commercially viable across all products and may not build long-term loyalty," said Waldron.

"Introducing promotions that will attract customers to a store or brand and be good for the bottom line is a science which cannot be left to gut-feel decisions or chance."

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