From Brand Loyalty To Brand Enthusiasm

Transcription

1 IBM Institute for Business Value & Global Consumer Products Industry Presenter: Jez Bassinder From Brand Loyalty To Brand Enthusiasm How today s consumers want to engage with your brand Food & Drink Innovation Network, London, November

2 About Jez Passionate about consumer goods and technology Executive Partner in IBM managing the global relationship with Unilever for IBM Loves imagining the future and how to get there 2 Contact: jeremy.bassinder@uk.ibm.com 2

3 Our hypothesis: Digital has fundamentally changed consumer behaviour with respect to brand loyalty Consumers are adopting technology at unprecedented rates. 6B Top two influencers of purchases are a friend s posts and pins on social networks. 2.5B Consumer brand loyalty appears to be waning. 78% Mobile devices world-wide; 1B+ of them smartphones Active Facebook, Twitter, and YouTube accounts Of consumers are not loyal to a particular brand 3 Source: Nielsen

4 IBM surveyed 18,462 consumers across 12 countries and 6 continents Primary Research from 12 Countries Total Surveyed = 18,462 USA n=1,547 UK n=1,537 South Africa n=1,521 Russia n=1,507 Mexico n=1,501 France n=1,523 China n=1,492 Japan n=1,624 Brazil n=1,504 Germany n=1,513 India n=1,622 Australia n=1,571 4 Source: CP IBV Consumer Survey 2014, n=18,462

5 Respondents were analysed across a range of age groups, income brackets, and product categories Age Groups n= % n= % n= % n= % 60+ n= % Income Brackets Lower n= % Middle n= % High n= % Affluent n= % Product Categories* Apparel & Footwear n= % Food & Beverage n= % Household Products n= % Personal Care n= % Tobacco n= % 5 Source: CP IBV Consumer Survey 2014, n=18,462 * Respondents were segmented into 2 product categories each

6 We asked consumers about their attitudes, preferences, and behaviour in order to truly understand their sentiment towards brands BRAND ATTITUDES How brand loyal are you? To what extent do you like to try new brands? How much do you want to actively engage? TECH USAGE Do you consider yourself tech savvy? How often do you use social media? Do you like to purchase gadgets as soon as they come out? PRODUCT DECISION CONSIDERATIONS What is your willingness to pay for specific brand characteristics or product features? How important are factors such as health and wellness, and social and environmental responsibility in your purchase decision making? SHOPPING BEHAVIOUR Which shopping channels do you use? How willing are you to share your personal data with brands? How influenced are you by different types of media? 6

7 Big Data approach applied to reveal a four distinct consumer clusters across all Categories and Countries Custom survey instrument for data collection across 5 Categories: Apparel, Food and Beverage, Household Products, Personal Care Products, Tobacco MaxDiff analysis used to analyse relative importance of product preferences for each Category and by Country Two-step cluster analysis (CA) used to reduce set of survey inputs into smaller subsets or groups Hierarchical to "set the landscape" of persons, products or occasions that can be characterized based on their similarities (e.g. product preferences) k-means iteratively to establish a final solution with a holdout sample to test reliability of the determined a fourcluster solution 7

8 We identified four consumer groups, each representing different levels of brand enthusiasm and engagement preferences Cluster Analysis Key Inputs: Brand attitudes & engagement preferences Purchase decision considerations Product preferences Technology adoption and use Shopper characteristics Disassociated Shoppers Low preference for being identified or engaged with by brands. Highly price sensitive. 14% (n=2,621) Product Purists Some desire to be recognized and catered to by brands, but not engaged. Stronger preference for locally made products. 25% (n=4,618) Brand Ambivalents Positive view towards brands yet somewhat reluctant to engage. 36% (n=6,656) Brand Enthusiasts High propensity for individual recognition and twoway engagement. 25% (n=4,565) High Low Brand enthusiasm 8 Source: CP IBV Consumer Survey 2014, n=18,462

9 Brand enthusiasm is a more relevant way to understand consumers in today s digital landscape Brand loyalty Brand enthusiasm Repeat Transactions Level of Communication Desired Willingness to Provide Input Degree of Comfort with Sharing Personal Data The extent to which consumers buy the same brand repeatedly The extent to which consumers want brands to actively recognize, communicate to, and dialogue with them. How willing and eager consumers are to provide input and feedback about brands. The level of comfort consumers have with sharing various forms of personal information with brands. No insight into why consumers repeat purchase or attitude towards brands OLD CONSUMER VIEW Provides not only an understanding of consumer preferences and behaviour, but also overall attitude towards and trust in brands NEW CONSUMER VIEW 9 Source: IBV Analysis

10 Brand Enthusiasts are a discrete group of consumers that are extremely open to brands 25% of total respondents Brand Enthusiasts Brand enthusiasm: 71 Level of Communication Desired: HIGH High demand for brands to identify, understand, and engage with them Willingness to Provide Input: HIGH Very eager to provide feedback and ideas to brands on new products Comfort with Sharing Data: HIGH Extremely comfortable sharing all forms of personal data with brands Geography: Predominantly growth markets 29% of USA 41% of Mexico 35% of Brazil Age: Skewed towards Millennials Income: Bimodal 13% of France 12% of UK 11% of Germany 24% of 44% of India South Africa 51% 36% 13% % 25% 20% 28% Lower Middle High Affluent 21% of Russia 4% of Japan 52% of China 12% of Australia 10 Source: CP IBV Consumer Survey 2014, n=18,462

11 Brand Ambivalents view brands positively, yet are uncertain about the extent to which they want to interact with brands 36% of total respondents Brand Ambivalents Brand enthusiasm: 53 Level of Communication Desired: MED Want to be recognized and catered to, but not actively engaged Willingness to Provide Input: MED Willing to provide input into new products only when prompted Comfort with Sharing Data: MED Somewhat comfortable sharing select forms of personal data Geography: Widespread represented in all 33% of USA 39% of Mexico 44% of Brazil 31% of France 46% of India South Africa 41% 37% 23% Income: Skewed Lower and Middle 40% 30% 35% of UK 32% of Germany 39% of Age: Primarily Millennials and GenX consumers 15% 16% Lower Middle High Affluent 47% of Russia 17% of Japan 37% of China 33% of Australia 11 Source: CP IBV Consumer Survey 2014, n=18,462

12 Product Purists are primarily older consumers from traditional markets that place value on local products with health benefits 25% of total respondents Product Purists Brand enthusiasm: 38 Level of Communication Desired: LOW Neutral to negative about being recognized or engaged Willingness to Provide Input: LOW Unwilling to provide feedback and input around new products Comfort with Sharing Data: LOW Uncomfortable sharing most forms of personal data Geography: Predominantly traditional markets 25% of USA 11% of Mexico 13% of Brazil 42% of France Age: Skewed towards GenX & Late Baby Boomers 21% 31% 47% Income: Skewed Lower and Middle 49% 35% of UK 39% of Germany 20% of India South Africa 30% 12% of 12% 9% Lower Middle High Affluent 17% of Russia 40% of Japan 9% of China 37% of Australia 12 Source: CP IBV Consumer Survey 2014, n=18,462

13 Disassociated Shoppers are older, lower income respondents with high price sensitivity and low desire to be identified or engaged 14% of total respondents Disassociated Shoppers Brand enthusiasm: 31 Level of Communication Desired: LOW Do not want to be recognized or engaged Willingness to Provide Input: LOW Uninterested in providing input around new products Comfort with Sharing Data: LOW Extremely uncomfortable sharing all forms of personal data Geography: Largely traditional markets 13% of USA 9% of Mexico 8% of Brazil 14% of France Age: Skewed towards GenX & Baby Boomers 21% 32% 46% Income: Predominantly Lower income 56% 18% of UK 18% of Germany 5% of 9% of India South Africa 26% 12% 6% Lower Middle High Affluent 15% of Russia 39% of Japan 2% of China 18% of Australia 13 Source: CP IBV Consumer Survey 2014, n=18,462

14 Led by Brand Enthusiasts, consumers are starting to establish direct relationships with brands via digital channels I often look up information on my phone about products when I am shopping in a store. (Percentage who agree) Brand Enthusiasts 63% Brand Ambivalents 21% Product Purists Disassociated Shoppers 6% 6% I have posted comments on aspects of a new product on a brand s website or social media page. (Percentage who agree) Brand Enthusiasts 51% Brand Ambivalents 29% Product Purists Disassociated Shoppers 9% 11% 14 Source: CP IBV Consumer Survey 2014, n=18,462. Q10: Look up info; Q09: Which if any of these have you done in the past 12 months? Posted comments Q09

15 However, proceed with caution: Brand Enthusiasts demand constant engagement and are loyal to newness I like to try new brands frequently 100% 80% 60% 40% 20% Brand Loyalty vs. Preference for Trying New Brands, by Cluster (Size denotes cluster population) Product Purists Disassociated Shoppers Brand Ambivalents Brand Enthusiasts 0% -10% 10% 30% 50% 70% 90% 110% Key Takeaways Consumer brand loyalty is increasingly fickle Brand loyalty no longer means purchase exclusivity Disassociated Shoppers and Product Purists demonstrate brand loyal behaviour but aren t -20% I consider myself to be brand loyal 15 Source: CP IBV Consumer Survey 2014, n=18,462. Q06_2: Try new brands; Q06_7: Brand loyal

16 Brand owners who are not taking advantage of the data consumers are willing to share are missing out on a key opportunity Degree of comfort with sharing personal information with brands Which products I ve purchased before My address How often and when I last purchased a product Demographic data Data related to my media usage habits Data related to my health and wellness My social media activity Data related to my lifestyle My cell phone number My online history Location-based data Disassociated Shoppers 14% 11% 15% 10% 12% 9%9% 16% 19% Product Purists 24% 42% 25% 24% 32% 37% Brand Ambivalents Brand Enthusiasts 62% 60% 69% 74% 16% 21% 40% 74% 15% 19% 35% 69% 13%16% 34% 71% 9% 10% 26% 65% 9% 11% 24% 60% 9% 11% 24% 59% 73% 16 % of Consumers who are Comfortable Source: CP IBV Consumer Survey 2014, n=18,462. Q08: Think about a trusted brand that you purchased recently. Indicate the extent to which you are comfortable or uncomfortable with that brand using personal information to customize a message or service to you.

17 Brands need to adjust their strategies to accommodate new consumer attitudes, behaviour, and norms Re-define your consumer mix for growth Prepare for tomorrow s digital world, not today s Create a consumerfocused, data-driven organisation Do you know who you Brand Enthusiasts are? How are you going to capture the Brand Ambivalents? Do you have impulse, point of sale initiatives underway to cater to Product Purists and Disassociated Shoppers? Are you starting to engage directly via digital? Are you preparing to deliver next level digital experiences? Do you have the right innovation and channel partners? Is your organization starting down the path of consumer centricity? Do you have the skills you need to keep up with Brand Enthusiasts? Are you leveraging consumer data and listening to consumer feedback? 17

18 What to know more? The IBM.com study page is here Read more about IBM work in food and drink at ibm.com/industries/uk/en/consumerproducts/ Join Marketing Week and Jez on November the 4th for a webinar outlining the steps to optimise the use of digital in marketing 18