Consumer disloyalty is the new normal

South Africa's consumers are 'playing the field'
Disloyalty levels are on the rise among consumers, with just 9% of South Africans considering themselves to be committed loyalists when it comes to their favourite brands, according to a global consumer study conducted by global measurement company and data analytics company, Nielsen.

Nielsen’s Global Consumer Loyalty study demonstrates that consumers are actively on the lookout for new brands as the gamble of buying new products is de-risked by levers such as rising income levels, broader product ranges and new retail channel options. A significant 38% of South African consumers say they love trying new things and a further 54% of consumers - whilst preferring to stick with what they know - can be moved to experiment.

“With the overwhelming majority of consumers actively or passively open to unfaithful actions, the risks for brand owners have never been greater,” said Ailsa Wingfield, Executive Director, Nielsen Global Markets Thought Leadership and Intelligence.

Locally, 56% of consumers single out value for money as the key factor influencing their choice of brand, followed by price reductions and promotions (50%). One third of consumers are influenced by superior quality and convenience. Thirty five percent of consumers are influenced by the fact that a brand is well known and trusted. What’s clear, is that although consumers are enticed by price they’re more likely to commit for tangible and intangible reasons. This means brands need to quantify how their physical attributes such as quality, function and convenience and their purpose attributes such as environmental impact, transparency and experience, out weight purely price, to keep consumers content in the longer term.

Wingfield pointed to related implications of not rethinking campaigns that focus on winning or retaining loyal customers. “The drag effect of consumer demand for choice and voting with their wallets will overwhelm existing marketing and product development efforts if brands don’t more aggressively address disloyalty in the marketplace.”

Overall, consumers’ willingness to try new brands is on the rise - 41% of South African consumers say they are more likely to try new brands they have never tried before, compared to five years ago. A further multiplier to the equation is that nearly a third (32%) of South Africa consumers are reviewing products across broader ranges than ever.

“We call this group “conscious considerers” and they’re important because, even though they are choosing more widely than ever across brands, they tell us they prefer to stay with those they’ve tried in the past. It will take more to convince these consumers to change, but they still send signals of disloyalty.” Wingfield said.

A larger proportion of consumers (closer to half) in developing markets than developed markets are enthralled with new products demonstrating an increase in brand-switching and trial, given that historically, retail and product assortment in these markets has been informal and limited, with only two or three product options on shelf per category. Previous consumer connections with brands were therefore less likely due to strong loyalty associations, and more likely a consequence of availability based buying.

However, as more products are brought to these developing markets, consumers are now being exposed to more choice and are able to try and trade off amongst the broader range of available products - in search of the best product solution. Brand owners will therefore have to work hard to gain and retain loyal consumers; and retention, extension and innovation propositions will need to extend beyond the rare loyalists, to maximise gains from new, experimenting consumers.

About the Nielsen Survey

The Nielsen Global Survey reaches over 30,000 internet users around the world, representing a global online population of nearly 2 billion consumers. The survey currently spans 64 countries. The survey is an internet questionnaire that takes about 30 minutes to complete. The sample is sourced from external providers and includes internet users who agreed to participate. The survey has quotas based on age and sex for each country. These quotas are reviewed at a country level by Data Science. The responses are based on the behaviour of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or 10 million online population for survey inclusion. At a country level where the sample is 500, the margin of error is ± 4.4%, meaning the movement needs to be bigger than this to be noteworthy.

ABOUT NIELSEN

Nielsen Holdings plc (NYSE: NLSN) is a global measurement and data analytics company that provides the most complete and trusted view available of consumers and markets worldwide. Our approach marries proprietary Nielsen data with other data sources to help clients around the world understand what’s happening now, what’s happening next, and how to best act on this knowledge. For more than 90 years Nielsen has provided data and analytics based on scientific rigor and innovation, continually developing new ways to answer the most important questions facing the media, advertising, retail and fast-moving consumer goods industries. An S&P 500 company, Nielsen has operations in over 100 countries, covering more than 90% of the world’s population. For more information, visit www.nielsen.com.

29 Jul 2019 16:00

<<Back





Comment
FOLLOW US
Latest News | About Nielsen | Contact Us | Website | Bizcommunity