Hold the brand loyalty, I’ll take my latte to go

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Forget the Marmite debate, the nation has moved on to the next supermarket scandal – Waitrose has confirmed the end of its free coffee without a purchase as shoppers have complained the scheme has been attracting the wrong kind of customer. Twitter exploded with complaints (some of them make a great read) from outraged customers who enjoy a free coffee and see it as a perk.

This blog is not about free coffee but about brand loyalty. Amazon, Apple, Google are leading the way in this with Amazon taking three of the top 20 spots in the 2016 Brand Keys Loyalty Leaders, and Apple taking two spots. It’s interesting that more than a third (35{20156fe61baea400d2663eb990f17abdabeb6ef183a2129287a793abd8ac1d8a}) of the list are digital technology, social networking brands, or brands that facilitate digital tech or social networking. Robert Passikoff, Brand Keys founder and president, explains that while digital brands represent the lion’s share of the list, consumers haven’t entirely deserted traditional and that ‘gift-wise loyalty is a leading indicator of positive consumer behaviour toward brands’.

The very public fallout between Unilever and Tesco was over before it began, but it raised some important issues about brand loyalty. Consumers may not be aware of their allegiance to the corporate giant that is Unilever but it incorporates all the brands we love. The media was clever in putting the focus on Marmite and Ben and Jerry’s because consumers either ‘love or hate’ Marmite, as its powerful slogan states and you cannot swap your Ben and Jerry’s Cookie Dough S’wich Up for any old own-brand vanilla! Whereas its brand Comfort can easily be replaced for a cheaper option.

It all comes down to the strength of a brand. Most consumers will value price more highly but when it comes to a product such as Marmite, which is a brand in its own right, consumers will choose the brand over the retailer.

One group that values brand loyalty above others is millennials, according to research from American Express. 62{20156fe61baea400d2663eb990f17abdabeb6ef183a2129287a793abd8ac1d8a} of millennials tend to only ever buy a preferred brand, versus 54{20156fe61baea400d2663eb990f17abdabeb6ef183a2129287a793abd8ac1d8a} of the wider population. And while money-saving offers are widely used across different age groups, the survey found that personalisation from businesses in their interactions was most important for millennials.

Millennials still love mobile apps, as research from comScore shows that they spent a massive 90 hours per month on smartphone apps alone. The research also found that mobile users tend to exhibit strong brand loyalty within apps, spending 18 times longer on the top 1,000 mobile apps compared to the top 1,000 web properties.

Retailers have taken note and adopted an omnichannel approach and are reaping the benefits mobile can bring to their business. A new whitepaper from App Annie, “The Growth of Retail Apps: What Retailers Can Learn from Top Apps” offers best practices for retail apps, including effective user acquisition and engagement strategies, traditional retailers can further enhance their success on mobile. The result? Higher conversion, increased brand loyalty, and more frequent customer engagement.

In an increasingly smart world, companies will need to adapt to ensure customer loyalty. Artificial intelligence (AI) is emerging as the prominent way in which consumers can engage with their brand of choice. According to Accenture’s Teo Correia, ‘AI will probably have more of an impact on ‘utility brands shopping basket’ purchases rather than ‘experience’ brands as it will help consumers to make those purchasing decisions they don’t want to have to think too much about by predicting our patterns of consumption.

A good example of this already playing out is Amazon Dash. The button allow for 40 brands, including Whiskas, Ariel and Andrex to be ordered with one touch. Correia argues that the next step could be where the fridge or washing machine predicts the consumer needs and presses the button to order. In a way this enforces loyalty by making predictions on past purchases but with the reduction in consumer interaction brands will need to make themselves more visible to the consumer – personalisation will be absolutely key to success.

As brands continue to fight for consumer loyalty and adapt their offering to stay ahead of the competition with technological developments, it will be interesting to see who wins – brand or consumers. And if a brand can use something as simple as free coffee to build and maintain loyalty, should it really scrap it? For now though, enjoy your free coffee!

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