From Brand Loyalty To Brand Enthusiasm - FDINfdin.org.uk/wp-content/uploads/2015/11/From-Brand...IBM Institute for Business Value 1 From Brand Loyalty To Brand Enthusiasm How today’s

IBM Institute for Business Value

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From Brand Loyalty To Brand EnthusiasmHow today’s consumers want to engage with your brand

IBM Institute for Business Value & Global Consumer Products Industry

Presenter: Jez Bassinder

Food & Drink Innovation Network, London, November 2015


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§Passionateaboutconsumergoodsandtechnology

§ExecutivePartner inIBMmanagingtheglobalrelationshipwithUnileverforIBM

§Lovesimaginingthefutureandhowtogetthere

About Jez

2Contact: [email protected]


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Our hypothesis: Digital has fundamentally changed consumer behaviour with respect to brand loyalty

6BMobile devices world-wide; 1B+ of them smartphones

Consumers areadopting technology at unprecedented rates.

Top two influencers of purchases are a friend’s posts and pins on social networks.

2.5BActive Facebook, Twitter, and YouTube accounts

78%Of consumers are not loyal to a particular brand

Consumer brand loyalty appears to be waning.

Source: Nielsen


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IBM surveyed 18,462 consumers across 12 countries and 6 continents

USAn=1,547

Mexicon=1,501

Braziln=1,504

UKn=1,537

Francen=1,523

Germanyn=1,513

South African=1,521

Chinan=1,492

Indian=1,622

Russian=1,507

Japann=1,624

Australian=1,571

Primary Research from 12 Countries Total Surveyed = 18,462


Source: CP IBV Consumer Survey 2014, n=18,4624


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Respondents were analysed across a range of age groups, income brackets, and product categories

Age Groups Income Brackets

Product Categories*

Lower n= 6545 41%

Middle n= 4478 28%

High n= 2427 15%

Affluent n= 2584 16%

18-29 n= 4351 24%

30-39 n= 3535 19%

40-49 n= 3378 18%

50-59 n= 2968 16%

60+ n= 4220 23%

Apparel & Footwear n= 7719 42%Food & Beverage n= 7726 42%

Household Products n= 7709 42%Personal Care n= 7711 42%

Tobacco n= 5644 31%


Source: CP IBV Consumer Survey 2014, n=18,462* Respondents were segmented into 2 product categories each


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We asked consumers about their attitudes, preferences, and behaviourin order to truly understand their sentiment towards brands

TECH USAGE• Do you consider yourself tech savvy?• How often do you use social media?• Do you like to purchase gadgets as soon as they come out?

BRAND ATTITUDES• How brand loyal are you?• To what extent do you like to try new brands?• How much do you want to actively engage?

SHOPPING BEHAVIOUR• Which shopping channels do you use?• How willing are you to share your personal data with brands?• How influenced are you by different types of media?

PRODUCT DECISION CONSIDERATIONS• What is your willingness to pay for specific brand characteristics

or product features?• How important are factors such as health and wellness, and

social and environmental responsibility in your purchase decision making?



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Big Data approach applied to reveal a four distinct consumer clusters across all Categories and Countries

• Custom survey instrument for data collection across 5 Categories: Apparel, Food and Beverage, Household Products, Personal Care Products, Tobacco

• MaxDiff analysis used to analyse relative importance of product preferences for each Category and by Country

• Two-step cluster analysis (CA) used to reduce set of survey inputs into smaller subsets or groups

• Hierarchical to "set the landscape" of persons, products or occasions that can be characterized based on their similarities (e.g. product preferences)

• k-means iteratively to establish a final solution with a holdout sample to test reliability of the determined a four-cluster solution


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We identified four consumer groups, each representing different levels of brand enthusiasm and engagement preferences

Brand Ambivalents

Brand enthusiasm

71

5336%(n=6,656)

38

Disassociated Shoppers

14%(n=2,621)

31

Product Purists

25%(n=4,618)

Brand Enthusiasts

25%(n=4,565)

Low

High

Low preference for being identified or engaged with by brands. Highly price sensitive.

Some desire to be recognized and catered to by brands, but not engaged. Stronger preference for locally made products.

Positive view towards brands yet somewhat reluctant to engage.

High propensity for individual recognition and two-way engagement.


Cluster Analysis Key Inputs:• Brand attitudes & engagement preferences• Purchase decision considerations• Product preferences• Technology adoption and use• Shopper characteristics


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Brand enthusiasm is a more relevant way to understand consumers in today’s digital landscape

Brand enthusiasm

Level of Communication Desired

The extent to which consumers want brands to actively recognize, communicate to, and dialogue with them.

Willingness to Provide Input

How willing and eager consumers are to provide input and feedback about brands.

The level of comfort consumers have with sharing various forms of personal information with brands.

Degree of Comfort with Sharing Personal Data

Source: IBV Analysis

Brand loyalty

No insight into whyconsumers repeat purchase or attitude towards brands

Repeat Transactions

The extent to which consumers buy the same brand repeatedly

Provides not only an understanding of consumer preferences and behaviour, but also overall attitude towards and trust in brands

OLD CONSUMER VIEW NEW CONSUMER VIEW


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Brand Enthusiasts are a discrete group of consumers that are extremely open to brands

Geography: Predominantly growth markets

Age: Skewed towards Millennials

51% 36% 13%

18-35 36-54 55+

Income: Bimodal

27% 25% 20% 28%

Lower Middle High Affluent

Brand Enthusiasts

25% of total respondents

Brand enthusiasm: 71• Level of Communication Desired:

HIGHHigh demand for brands to identify, understand, and engage with them

• Willingness to Provide Input: HIGHVery eager to provide feedback and ideas to brands on new products

• Comfort with Sharing Data: HIGHExtremely comfortable sharing all forms of personal data with brands


21% ofRussia

24% ofSouth Africa

29% ofUSA

12% ofUK

12% ofAustralia

35% ofBrazil

52% ofChina

13% ofFrance

11% ofGermany

41% ofMexico

4% ofJapan

44% ofIndia


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Geography: Widespread – represented in all

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Brand Ambivalents view brands positively, yet are uncertain about the extent to which they want to interact with brands

41% 37% 23%18-35 36-54 55+

Income: Skewed Lower and Middle

40% 30% 15% 16%


47% ofRussia

46% ofSouth Africa

33% ofUSA

35% ofUK

33% ofAustralia

44% ofBrazil

37% ofChina

31% ofFrance

32% ofGermany

39% ofIndia

39% ofMexico

Brand Ambivalents


17% ofJapan


MEDWant to be recognized and catered to, but not actively engaged

• Willingness to Provide Input: MEDWilling to provide input into new products only when prompted

• Comfort with Sharing Data: MEDSomewhat comfortable sharing select forms of personal data


Age: Primarily Millennials and GenX consumers


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Geography: Predominantly traditional markets

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Product Purists are primarily older consumers from traditional markets that place value on local products with health benefits

Age: Skewed towards GenX & Late Baby Boomers

21% 31%47%

18-35 36-54 55+

Income: Skewed Lower and Middle

49%30% 12% 9%


Product Purists



LOWNeutral to negative about being recognized or engaged

• Willingness to Provide Input: LOWUnwilling to provide feedback and input around new products

• Comfort with Sharing Data: LOWUncomfortable sharing most forms of personal data


17% ofRussia

20% ofSouth Africa

25% ofUSA

35% ofUK

37% ofAustralia

13% ofBrazil

9% ofChina

42% ofFrance

39% ofGermany

12% ofIndia

11% ofMexico

40% ofJapan


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Geography: Largely traditional markets

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Disassociated Shoppers are older, lower income respondents with high price sensitivity and low desire to be identified or engaged

Age: Skewed towards GenX & Baby Boomers

21% 32%46%

18-35 36-54 55+

Income: Predominantly Lower income

56%26% 12% 6%





LOWDo not want to be recognized or engaged

• Willingness to Provide Input: LOWUninterested in providing input around new products

• Comfort with Sharing Data: LOWExtremely uncomfortable sharing all forms of personal data


15% ofRussia

9% ofSouth Africa

13% ofUSA

18% ofUK

18% ofAustralia

8% ofBrazil

2% ofChina

14% ofFrance

18% ofGermany

5% ofIndia

9% ofMexico

39% ofJapan


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Led by Brand Enthusiasts, consumers are starting to establish direct relationships with brands via digital channels

6%

6%

21%

63%

“I often look up information on my phone about products when I am shopping in a store.”(Percentage who agree)

9%

11%

29%

51%

“I have posted comments on aspects of a new product on a brand’s website or social media page.”(Percentage who agree)

Brand Enthusiasts

Brand Ambivalents

Product Purists


Brand Enthusiasts

Brand Ambivalents

Product Purists


Source: CP IBV Consumer Survey 2014, n=18,462. Q10: Look up info; Q09: Which if any of these have you done in the past 12 months? ‘Posted comments’ Q09


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However, proceed with caution: Brand Enthusiasts demand constant engagement and are loyal to newness

-20%

0%

20%

40%

60%

80%

100%

-10% 10% 30% 50% 70% 90% 110%

Brand Enthusiasts

Brand Ambivalents

Product Purists


I consider myself to be brand loyal

I lik

e to

try

new

bra

nds

freq

uent

ly

Brand Loyalty vs. Preference for Trying New Brands, by Cluster(Size denotes cluster population)

Key Takeaways• Consumer brand

loyalty is increasingly fickle

• Brand loyalty no longer means purchase exclusivity

• Disassociated Shoppers and Product Purists demonstrate ‘brand loyal’ behaviour—but aren’t

Source: CP IBV Consumer Survey 2014, n=18,462. Q06_2: Try new brands; Q06_7: Brand loyal


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Brand owners who are not taking advantage of the data consumers are willing to share are missing out on a key opportunity

Degree of comfort with sharing personal information with brands

% of Consumers who are Comfortable

Brand Enthusiasts

Brand Ambivalents

Product Purists


16%

14%

11%

10%

9%9%

12%

15%

19%

24% 42%

37%

32%

25%

24%

74%

73%

69%

62%

60%

16% 21% 40% 74%

15% 19% 35% 69%

13%16% 34% 71%

Source: CP IBV Consumer Survey 2014, n=18,462. Q08: Think about a trusted brand that you purchased recently. Indicate the extent to which you are comfortable or uncomfortable with that brand using personal information to customize a message or service to you.

10%9% 26% 65%

9% 11% 24% 59%

9% 11% 24% 60%

Which products I’ve purchased before

How often and when I last purchased a product

Data related to my health and wellness

Data related to my lifestyle

My cell phone number

My email address

Demographic data

Data related to my media usage habits

My social media activity

Location-based data

My online history


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• Is your organization starting down the path of consumer centricity?

• Do you have the skills you need to keep up with Brand Enthusiasts?

• Are you leveraging consumer data and listening to consumer feedback?

• Are you starting to engage directly via digital?

• Are you preparing to deliver next level digital experiences?

• Do you have the right innovation and channel partners?

• Do you know who you Brand Enthusiasts are?

• How are you going to capture the Brand Ambivalents?

• Do you have impulse, point of sale initiatives underway to cater to Product Purists and Disassociated Shoppers?

Re-define your consumer mix for

growth

Prepare for tomorrow’s digital world, not today’s

Create a consumer-focused, data-driven

organisation

Brands need to adjust their strategies to accommodate new consumer attitudes, behaviour, and norms


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What to know more?

§The IBM.com study page is here

§Read more about IBM work in food and drink at http://www-935.ibm.com/industries/uk/en/consumerproducts/

§Join Marketing Week and Jez on November the 4th for a webinar outlining the steps to optimise the use of digital in marketing https://www.brighttalk.com/webcast/5932/174949

Documents

From Brand Loyalty To Brand Enthusiasm - FDINfdin.org.uk/wp-content/uploads/2015/11/From-Brand...IBM Institute for Business Value 1 From Brand Loyalty To Brand Enthusiasm How today’s