From Brand Loyalty To Brand Enthusiasm - FDINfdin.org.uk/wp-content/uploads/2015/11/From-Brand...IBM...
Transcript of From Brand Loyalty To Brand Enthusiasm - FDINfdin.org.uk/wp-content/uploads/2015/11/From-Brand...IBM...
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
IBM Institute for Business Value
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§Passionateaboutconsumergoodsandtechnology
§ExecutivePartner inIBMmanagingtheglobalrelationshipwithUnileverforIBM
§Lovesimaginingthefutureandhowtogetthere
About Jez
2Contact: [email protected]
IBM Institute for Business Value
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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
IBM Institute for Business Value
Source: CP IBV Consumer Survey 2014, n=18,4624
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IBM Institute for Business Value
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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%
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Source: CP IBV Consumer Survey 2014, n=18,462* Respondents were segmented into 2 product categories each
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IBM Institute for Business Value
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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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IBM Institute for Business Value
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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
IBM Institute for Business Value
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IBM Institute for Business Value
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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.
Source: CP IBV Consumer Survey 2014, n=18,462
Cluster Analysis Key Inputs:• Brand attitudes & engagement preferences• Purchase decision considerations• Product preferences• Technology adoption and use• Shopper characteristics
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IBM Institute for Business Value
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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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IBM Institute for Business Value
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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
Source: CP IBV Consumer Survey 2014, n=18,462
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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IBM Institute for Business Value
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%
Lower Middle High Affluent
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
36% of total respondents
17% ofJapan
Brand enthusiasm: 53• Level of Communication Desired:
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
Source: CP IBV Consumer Survey 2014, n=18,462
Age: Primarily Millennials and GenX consumers
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IBM Institute for Business Value
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%
Lower Middle High Affluent
Product Purists
25% of total respondents
Brand enthusiasm: 38• Level of Communication Desired:
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
Source: CP IBV Consumer Survey 2014, n=18,462
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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IBM Institute for Business Value
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%
Lower Middle High Affluent
Disassociated Shoppers
14% of total respondents
Brand enthusiasm: 31• Level of Communication Desired:
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
Source: CP IBV Consumer Survey 2014, n=18,462
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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IBM Institute for Business Value
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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
Disassociated Shoppers
Brand Enthusiasts
Brand Ambivalents
Product Purists
Disassociated Shoppers
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
IBM Institute for Business Value
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IBM Institute for Business Value
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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
Disassociated Shoppers
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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IBM Institute for Business Value
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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
Disassociated Shoppers
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
IBM Institute for Business Value
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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