Between 2006 and 2010, the brand loyalty (loyalty to the brand) has fallen sharply. During this time, fewer and fewer consumers admitted that they
“own the best brand is important to me” .
How did it come to this situation? The main reason is that the recession has forced other priorities, away from the leading brands and close to the low prices.
But brand loyalty, a willingness to repurchase products / services of the same brand, not necessarily tied to something for the elite, or high price. Economic instability can, for example, the emergence of brands that operate on the lower price ranges (such as Wal-Mart, the gap Payless stores or 99-cents).
The technology erodes Brand Loyalty
Economic conditions aside, there is a culprit that causes the decline of brand loyalty: the rapid innovation in technology has provided customers with new tools to discover, compare, evaluate, choose and experience the brand. For example, the application for smartphone ShopSavvy allows you to literally expand the choices of buyers by offering alternatives to the user (complete with reviews and store geo). The users are more loyal to Amazon’s “channel” – or Amazon – rather than the products that you can buy on the site. Finally, sites like Bizrate, Google Products or Expedia offer buyers comparison tools that increase the probability of finding the best new brand or business somewhere else.
Thanks to these technologies, customers are becoming increasingly independent of the brand: the statistics show that more than a consumer technology-optimistic , the less loyal to brands. The technology-optimistic is usually a person with high income, which adopted the first of other new technology products (such as smartphones), new distribution channels (like app) and new promotion systems (such as Groupon). Because the technology-optimistic like owning the latest technology, are more likely to switch to new brands to the strong desire to be at the forefront.
The correlation between technology optimism and less brand loyalty has grown so pronounced in the last 5 years, and almost every business on the web can see that the “digital customer” today are less loyal to brands that have previously purchased.
How to restore Brand Loyalty?
If this type of user is no longer loyal to brands, what can companies do? The answer is to empower consumers through technologies that can strengthen the brand, rather than erode it.
Let’s take an example. Imagine that the leadership of The Gap wants to strengthen brand loyalty. Could come up with something that combines:
Brand . The Gap could do with a co-branded media brands, such as Project Runway, perhaps creating a partnership for a design contest.
Simulation . The Gap and Project Runway, for the contest, may rely on the platform of Xbox Live and Kinect. One idea would be to put 2 groups of friends compared to that challenge in the design, virtually, the autumn-winter collection for The Gap. The clothes could be produced, then really, on the basis of the game, using the lever of the complete customization of the head (which is seen as the future in clothing).
Product . Finally, fans of Project Runway does not just want to play, but want to buy clothes that have created with the game. Allow customization to The Gap clothing to sell real fact based on the tastes of individual buyers. And customers may purchase any of the final leaders emerged from the contest, most likely oriented toward the winning design.
The company should “think different”
Create an experience around a digital product is extremely difficult. New partnerships are required (such as the example of Project Runway), new technologies (such as the customization of head) and new platforms (like Xbox). Yet companies like The Gap should realize that without such initiatives is much more vulnerable to the decline of brand loyalty.
If there is a move that the leaders of each sector can do to avoid this problem is to hire people who understand fully digital. “We have a guru iPad” is a common refrain you hear say that today in many companies. It ‘a beginning, but it does not take into account the number and variety of devices on the market is still growing.
Hire new talent able to identify the best opportunities on various digital devices (gaming consoles, smartphones, tablet, ereader, Internet TV): these devices are flooding the market, and products / services will necessarily follow the wave.
