Brand loyalty is changing due to the pandemic

Mar 1, 2021

We found this article on by Chris Morris and found it interesting so we thought we would share:

COVID-19 has already tested our patience, our focus, and our compassion. Now it could be testing our allegiance as well.

Two recent studies show that U.S. consumers are shifting their loyalty to certain brands as the pandemic continues. And that has marketing departments scrambling to adjust how they connect with their audience.

A July report from communications firm Ketchum found that 45% of American shoppers have altered their brand preference amid the rapid changes in the world. A month later, research from McKinsey put that number at 75%.

Experts say people have shifted to private label brands from stores like Target, Amazon, and Aldi on products ranging from paper towels and garbage bags to cheeses and clothing. Consumers were also much less picky about which brand of toilet paper, hand sanitizer, and cleaning supplies they could find because of rushes on products at the start of stay-at-home orders.

“For certain products and brands, COVID-19 caused supply-chain disruptions,” says the McKinsey report. “And when consumers couldn’t find their preferred product at their preferred retailer, they changed their shopping behavior: Many consumers have tried a different brand or shopped at a different retailer during the crisis.”

Lockdown also had a notable role in the wavering loyalty to brands. In Japan, where there was no formal stay-in-place order given, just 33% of people adjusted their shopping habits.

Unfortunately for the brands left behind, many of those customers might not be returning.

“We expect these changes will shape consumers’ habits even beyond the effects of COVID-19,” says McKinsey. “In…the U.S., upward of 60% of consumers who tried a new behavior plan to stick with it post-crisis.”

Ketchum’s study agreed, saying that 62% of people who have changed their brand preference will make that a permanent change before the pandemic is over.

“We’re seeing massive consumer behavior shifts that are likely to persist,” says Mary Elizabeth Germaine, partner and managing director at Ketchum Analytics.

Robert Passikoff, founder and president of Brand Keys, a brand loyalty and customer engagement consulting firm, disagrees, though. Some shoppers might be buying other brands out of necessity, he says, but they’ll return to the names they know as soon as they have the opportunity.

“People are looking for particular brands, and they’re loyal to particular brands,” he says. “The COVID-affected categories are easy to see, but it’s not an issue of ‘I was loyal before March and now that it’s September, I’m not loyal anymore.’ That’s just not the case…There’s always going to be someone who goes ‘Wow, this was exactly the same,’ but the majority of people have found a brand which meets their expectations better than the others and are not willing to trade off when it’s available.”

Beyond availability, the reasons for the consumer loyalty shift include value and convenience. People are looking for deals as money gets tight—and they are trying to get their shopping done in as few places as possible.

“Shoppers do not want to visit multiple stores to cherry-pick the good deals on branded goods,” says Doug Bowman, professor of marketing at Emory University’s Goizueta Business School. “So it’s easy to imagine a situation where a shopper may be more likely to just buy the store’s private label brand to get a good price in a category rather than visit a second store.”

Store brands and microbrands, says Bowman, could see a rise in popularity as the pandemic continues. While inventory levels on many items are largely back to normal, many shoppers are still concerned about their finances, and if a store brand’s quality matches what they’re used to, they’ll continue to opt for it.

“If you’re getting, say, spaghetti sauce and you try a private label, the next time you go to that store, you might say, ‘This worked for me, so I’m going to get it again,’” he says. “And then, maybe you’re willing to expand to other [generic] product categories.”

There is one other factor that could be impacting consumer loyalty, though: other consumers.

“Consumers were relying on brands before for messaging on perceived quality,” says Bowman. “Now they’ve got information from actual users about the actual quality of the product. That was happening before, but it’s accelerated during the pandemic since people are ordering a lot more online. People are being exposed to a lot more online reviews and saying, ‘I’m going to try it.’”

Ultimately, though, says Passikoff, people might try new things, but they’ll go with what they enjoy, regardless of price.

“Satisfaction is something where either you’ve got it or you don’t, and then you’re moving on to something else,” he says.

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