August 25, 2017
In the past 5 years retailers and malls have been closing up shop, and in turn shifting their energy towards online mediums such as Amazon. Regardless of where or how you make purchases, a lot of what fuels consumer buying behavior come down to brand loyalty. This is according to a new study by the International Council of Shopping Centers’ (ICSC) who found that the majority of consumers are most loyal to product focused brands and retailers.
More specifically, this means the majority of U.S. adults tend to continue buying the same brand of goods rather than competing brands; however, between millennials, Gen Xers, and Baby Boomers, their purchasing habits vary by industry. While there are some similarities, for example everyone is dedicated to their own favorite food and beverage brands, where each buys furniture, hobby related goods, and hardware are less set in stone.
“Retail is a highly competitive industry and the well-informed consumer has more influence on retailers and brands than ever before,” said President and CEO of ICSC Tom McGee. “A physical retail space is vital for brands and retailers to have a competitive advantage and connect with consumers. Consumers want the best experience and the best value, in turn rewarding brands and retailers with their loyalty.”
Based on ICSC’s data, millennials are more set in their ways when choosing furniture at 62 percent (thanks Ikea), Gen Xers are far and above other generations when it comes to where they buy hobby toys and craft supplies at 74 percent, and Gen Xers are also locked into who provides their hardware and building materials at 70 percent.
According to ICSC, Baby Boomers are indifferent to the brands they buy from in each of these categories; however, for household goods, electronics, beauty supplies, and apparel, boomers know what brands to they should stick with. But how about differences in gender? Nothing too surprising here.
“More males than females indicated loyalty to specific product brands when purchasing electronics, building materials/hardware and sporting goods, hobby/craft supplies and toys. Larger shares of females are loyal to specific brands of household goods, health and beauty products and apparel,” states the ICSC report.”
National, Store Brand, or Local?
Regardless of age, consumers also appear to be unified when it comes to where the goods come from. Apparel and footwear? We’re pretty set on buying nationally recognized brands (65%) and only 26 percent said they were loyal to store or specialty brands. The same goes for beauty products and sporting goods. In fact the only store or speciality brand that consumers said they were most interested in are hardware and building materials (46%), and local only really stands out when it comes to furniture brands (19%).
What Drives Consumer Loyalty?
Besides what and where you buy, there are also some common attributes that drive loyalty regardless of age. According to ICSC, driving loyalty to specific retailers in 2017 are price and value based with nine out of 10 (92%) loyal customers ranking this the top reason they make a purchase. This is followed by product quality (79%), and variety or selection (71%) offered. ICSC attributes this to technology and consumers becoming better informed.
On the other side of the spectrum are things like corporate responsibility (15%), their online platform in place (20%), and having exclusive products (28%), which have little impact on consumer brand loyalty. However, loyalty and sales drivers are not the same thing, so these attributes may still impact overall revenue.
Customer experience on the other hand can impact whether or not a consumer will remain loyal to a brand, with Gen Xers (86%) and Boomers (85%) stating they would switch to a competitor due to poor service. Following just behind, millennials (74%) would also break their ties with a brand after receiving poor customer service.
“As millennials enter their prime spending years we are going to see a shift in the way they engage with brands and retailers,” said McGee. “It’s crucial for brands and retailers to understand the shopping habits of this demographic so they win their loyalty for the years to come.”
Read more about marketing to different generations at TechCo
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