IN SUMMARY: According to Forbes “among the top 100 CPG brands, 90 experienced share declines, according to a 2015 study by Catalina, a leading digital and consumer loyalty firm. The standard for brand switching is no longer the failure of a brand to perform but rather its inability to seem like an entirely new and interesting option at every single purchase cycle. Sorry, but this is off base.
Why aren’t consumers loyal to brands? Well first, it depends on the product category. Consumers, for example, are very loyal to some car brands and people on my cycling groups are very loyal to bicycle brands. However, when it comes to the grocery store loyalty is in fact waining. But why?
1ne: Private label sales are increasing to the point that there is even “premium” private label now. Within the past year, sales of private-label brands have surpassed those of manufacturers’ brands, according to a Nielsen report cited by Food Navigator. A report by Daymon, a global consumer retail and private brand agency, found that 81 percent of consumers buy private label products every time or almost every time they visit the grocery store. The report also highlighted that 85 percent of consumers trust private brands as much as national brands and that private label product sales increased by four percent in 2017, which is eight times higher than national brands.
2wo: Merchandising – CPH items that are displayed on end caps sell better than those in the aisle. Retailers know this and are using endcaps for more private label and other high margin products.
3hree: Corporate misbehavior – Consumers see most corporations as greedy as proven by corporations using their tax cuts for shareholders and to increase profits. Millennials especially find this trend repulsive and it’s driving
4our: Brand see consumers as quantitative segments – Big data has reduced brands ability to see them as individuals at a time when they want to be recognized by brands.
5ive: The brand promised is broken – see above. What’s the brand promos of buying Bumble Bee tuna?
6ix: Prices keep rising – The news that some brands are raising prices is not good news for anyone. Consumers are smarter than brands and see that their hard earned dollars are not going as far as they used to.
Finally, too many brands are not really listening to consumers on social media. Responses are too generic and people hate BOTS. Responses need to solve consumers problems not just say “I’m sorry”. That doesn’t cut it anymore.
Perhaps the biggest knife into CPG brand loyalty is the era of “big data”. You can’t put consumer behavior into a quantitative
