Study Finds 38% Of Brands Already In 'Recession,' Albeit A Loyalty One

While economists have not yet declared and official recession, American consumers already have, according to findings of an ongoing tracking study released by Brand Keys this morning.

"Nearly seventy percent of consumers believe a recession has already arrived," the brand researcher found based on its analysis of consumer loyalty sentiment related to 39 brand categories.

“In this instance, perception is reality," Brand Keys Founder and President Robert Passikoff asserts, adding, "Supply chain disruptions, low inventories, and inflation all logically affect sales. Loyalty is a totally different paradigm and operates differently.”

The study also indicates U.S. brands may be heading into a "recession of brand loyalty" due to the way marketers are dealing with the economic one. It found hat 38% of the categories it analyzed have already seen consumer brand loyalty begin to recede. While 44% have seen brand loyalty grow, 18% are status quo.



Among the categories experiencing a recession in brand loyalty are ones that appear to be tied explicitly to economics and/or supply chain issues:

  • Airlines
  • Appliances
  • Beverages (non-alcoholic)
  • Credit Cards
  • Electronics
  • Gasoline
  • Hotels
  • Insurance
  • Investments
  • Online
  • OTC
  • Pharma
  • Casual Dining
  • Retail
  • Streaming Video
  • Utilities

“Consumers can’t control the economy,” Passikoff explains, adding, “But they do manage loyalty. Brand loyalty is never about price. It’s the emotional engagement that ensures future purchase. It’s the degree to which a brand meets expectations consumers hold for their category Ideal.” It’s the unequivocal answer to the question, ‘How well does the brand deliver on what you really desire?’ In this instance, how brands are meeting their expectations in the context of a recession.

“A recession – or consumers’ perceptions of a recession – became the perfect test market for brand loyalty."

said Passikoff. While a recession may force consumers to adjust their spending or even buy a substitute brand, it doesn’t affect their loyalty to a brand. Categories adapt to economic circumstances, with loyalty levels increasing or decreasing.

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