Economy Shakes Brand Loyalty

JULIE GALLAGHER

ST. PETERSBURG, Fla. — More than half of consumers (52%) who were highly loyal to the average CPG brand in 2007 either reduced loyalty or completely defected to another brand in the same category the following year, according to “Losing Loyalty: The Consumer Defection Dilemma.”

Conducted by Catalina Marketing’s Pointer Media Network in conjunction with the CMO Council, it examined the buying patterns of 32 million consumers across 685 CPG brands over two years.

Although Thomas’ English Muffins performed far better than many other brands, nearly one-quarter of shoppers who were highly loyal in 2007 either reduced their loyalty (14.4%) or completely defected from the brand (9.3%) in 2008.

More than three-quarters (75.3%) of Coca-Cola’s highly loyal consumers remained that way from 2007 to 2008, as did 60.7% of Folgers Coffee drinkers, and 49.8% of A.1. Steak Sauce consumers.

The economy has had a significant impact on consumers' allegiance to many leading brands, but loyalty can be shaken, even in the best of market conditions, Todd Morris, senior vice president of Catalina Marketing, told SN.

“In many conversations with clients, there is a belief that loyalty is forever,” he said. Defection "is heightened for the downturn, but this isn’t a new phenomenon; it’s been a factor driving marketing for a number of years.” Though the study didn't examine the role of store brands, "it only stands to reason that many are moving to private-label brands," Morris said.

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