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How brand loyalty is disappearing and what to do about it | Sponsored Content

This article was contributed and sponsored by Sightly.

We’ve heard a lot about how the coronavirus pandemic has accelerated several marketing and media trends, such as cord cutting, online shopping and live video viewing. But we haven’t heard as much about how the pandemic is accelerating the erosion of brand loyalty.

Marketing teams have been battling this problem for decades. The emergence and growth of national retailers, private labeling, competitive pricing, and ecommerce-driven convenience shopping have chipped away at brand loyalty over time. And the situation has become worse throughout 2020 and into 2021.

How bad is it?

According to Fortune magazine, a July 2020 report from Ketchum noted that “45% of American shoppers have altered their brand preference amid the rapid changes in the world.” And a short month later, McKinsey’s research estimated that number at 73%.

The pandemic certainly has accelerated the shift to online shopping and this is further eroding brand loyalty by:

  • Exposing consumers to other brands through connected ratings and reviews.
  • Promoting certain products over others in search results.
  • Adding price and/or delivery perks in the selection process.

More people are drawn to deals when their finances are constricted, and they are more likely to sacrifice brand preference for lower cost or greater value.

Is it going to last?

McKinsey analysts expect these attitudes to continue—according to their research, more than 75% of US consumers plan to stick with new shopping behaviors post-pandemic.

What do we do about it?

Some industry stakeholders recommend integrating brand-building media tactics with ecommerce experiences as a way to battle loyalty defections in the online purchase process. Suggestions include running paid search, display and video ads on retailer sites and apps, as well as placing other paid promotions in retailers’ targeted emails and social posts.

However, tactics like these may not be enough to hold off the deeper, long-standing forces eroding brand loyalty.

As far back as 2016, research from Catalina and McKinsey suggested that consumer loyalty had already been significantly eroded, and that underlying cultural and attitudinal shifts, driven largely by progressive technology, had gradually increased the value of the “new” or “different” vs. the “known.”

Now, just as COVID has accelerated a long-term trend like digital adoption, it has also accelerated our consumption of change and solidified its prominence in our habits and desires.

Embracing change

As consumers endure more and more change each day, brands and their agencies need a way to read emerging signals in the vast ocean of data generated every moment by our current technologies—and respond opportunistically in real time to maximize their desired outcomes.

In order to respond effectively to viral trends, breaking news, industry moves, influencers and thought leaders, brands should tap into a framework that enables them to move with speed even in short windows of opportunity.

For more details about our Brand Mentality™ framework, and how one CPG client quickly drove a seven-fold increase in purchase intent behaviors when some controversial news polarized a competitor’s customers, request a private seminar for you and your team.

— Robert Helstrom, Vice President, Marketing, Sightly