According to the recent results of a comScore study on brand loyalty among consumer goods products, showing a significant decline in consumers' allegiance to their favorite brands during the past two years, the percentage of shoppers who typically buy the brands they want most has steadily declined across the categories examined. In March 2010, less than 50% of shoppers reported purchasing the brand they want most.
comScore chairman, Gian Fulgoni, said "A decline in loyalty to consumer goods brands is typically one of the byproducts of a recession as consumers give greater consideration to price... (our) research... has quantified the impact of the ‘trading down' effect... highlighting consumers' increasing willingness to switch brands in the face of pocketbook constraints."
In some categories, particularly CPG household products and housewares, consumers were already more likely to buy a brand they didn't "want most" at the start of the recession. Some categories (e.g., paper towels, facial tissue) have not seen increased trading down from a brand perspective, possibly because such categories have led the way in tiering, allowing consumers to stick with their preferred brand at a more attractive price point.
As the economic downturn has persisted, this trading down behavior appears to be spreading to categories that were previously immune. The increases in trading down in these categories have largely occurred in the last year. Higher ticket items have seen large increases in trading down possibly due to larger absolute savings on a single purchase.
Percent of Respondents Who "Buy The Brand They Want Most" (March 2010 vs. March 2009 vs. March 2008, Total U.S.)
Net Shift 2010 vs. 2008
Health & Beauty Aids
Source: comScore ARS, May 2010
U.S. consumers were also asked about the type of brand they did buy when not their preferred one, with a focus on the importance of promotional discounts and lower price in causing the shift.
Consumer Sentiment on "Trading Down" (March 2010 vs. March 2008 Total U.S).
Net Shift 2008 to 2010
"I buy the brand I want most"
"I sometimes buy a different brand if it is on sale"
"I buy less expensive brands to save money"
Health & Beauty Aids
Source: comScore, Inc, May 2010
For most categories, the drop in likelihood to shop for the brand wanted most is not restricted to buying other brands on sale. Rather, a sizeable percentage of the change in shopping approach is being driven by a decision to convert to less expensive brands to save money.
Mr. Fulgoni added: "Despite these shifting consumer dynamics, research has repeatedly shown that premium brands which invest in marketing and promotion activities aimed at maintaining buying at ‘preferred' levels are able to minimize short-term erosion of share to less expensive brands and position themselves for a bounce-back when the economy improves."
For additional information about this study, please visit comScore Press here.