Consumer Brand Loyalty Declines

May 6, 2010

US consumers are significantly less loyal to their favorite brands today than they were two years ago, according to comScore ARS research.

Consumers Don’t Buy Preferred Brands
comScore evaluated the change in brand loyalty within a number of consumer goods categories, including health & beauty aids, OTC medications, apparel, food, household products and housewares. As the economic downturn has continued, the percentage of shoppers who typically buy the brands they want most has steadily declined across the categories and segments examined.


For example, in March 2008, 67% of consumers said they buy the brand of toothpaste they want the most, the highest percentage across all segments studied. By March 2010, this had dropped to 57%, and toothpaste still led all segments in brand loyalty.

The mouth rinse segment, which had 61% consumer brand loyalty in March 2008 (second-highest among all segments), experienced the largest drop of any segment, a 17-percentage-point fall to 44% brand loyalty (sixth-highest) in 2010.

In March 2008, the paper towel segment had the lowest brand loyalty (36%), but only experienced a slight drop to 35% by March 2010, ranking it second-lowest ahead of small appliances (which fell from a third-lowest 45% in March 2008 to 34% in March 2010).

Other segments experiencing significant declines in their brand loyalty percentages between March 2008 and March 2010 included jeans (down 15 percentage points, from 54% to 39%), cough/cold/allergy (also down 15 percentage points, from 58% to 43%) and shampoo (down 13 percentage points, from 65% to 52%). No segment tracked by comScore gained brand loyalty in this time period.

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 (e.g. HBA, OTC). 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.

Less Expensive Brands Gain Market Share
A sizable portion of the business lost by preferred brands in most categories during the past two years has gone to less expensive brands, and not just other brands which happen to be on sale. For example, half of the 14% of sales lost in the health and beauty category between March 2008 and March 2010 (7%) went to less expensive brands. Four-fifths of the 15% of sales lost in the apparel category (12%) went to less expensive brands. Only one-fifth of sales lost in the consumable category (1%) went to less expensive brands.


comScore Chairman Gian Fulgoni said premium brands still have a place in today’s market, however. “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,” said Fulgoni.

Private Label Brands Make Gains in Weak Economy
In another sign of declining consumer brand loyalty, private label brands are proving consistently popular with consumers looking to save money in a weak economy, according to research from The Nielsen Company.

Private label brands captured a 20 unit share or higher in 48 of 117 categories analyzed by Nielsen during the 52 weeks ended March 20, 2010. Private label brand share fluctuated widely by department, from a high of 40% for the dairy department to a low of less than 1% for alcoholic beverages. Nielsen analysis indicates this mirrors the typical pattern of store brand strength in commodity categories like milk, eggs and sugar, as well as those with little “consumer-perceived” differentiation such as first aid or wrapping materials.

However, in categories with a history of strong brand marketing support like beer and candy, or those with a high demonstrated level of innovation such as deodorants and detergents, store brand share remains relatively weak and undeveloped.

45th Parallel Design Ad

Explore More Charts.

Pin It on Pinterest

Share This