Brand Loyalty in Food and Grocery: The Role of Shopper Marketing

What is Brand Loyalty?

‘Brand loyalty’ is the measure of a shopper’s commitment to repeatedly purchase a particular brand, despite the efforts of competing brands to influence their behaviour otherwise. Brand loyalty may also demonstrated by the shopper endorsing the brand to friends and family through word of mouth.

True brand loyalty can enable brands to command a premium over their competitors, in some cases even where there are alternatives of equal or even higher quality available at a lower price.

Food and grocery shoppers are however rarely loyal to a single brand; nor do they consider all of the brands available to them at the supermarket fixture. Their loyalty spans a ‘set’ of brands they are personally familiar with and would consider buying. Some shoppers are more loyal to one specific brand than all others yet still consider others, while others are not loyal to one single brand in particular at all and yet still choose from a brand consideration set.

This consideration set, or ‘repertoire’, is in many cases quite fluid – and can be influenced not only by traditional brand marketing through mass media, but also in response to in-store marketing that targets the consumer in ‘shopper mode’.

Indeed, those factors that traditionally reinforce brand loyalty (typically heritage, satisfaction, reliability, ease, trust) do not necessarily equate to those that encourage shoppers to switch brand, or broaden their repertoire (for example promotion, packaging, eye catching displays or a desire to try something new). While traditional brand marketing campaigns seek to reinforce the emotional connection with the consumer, in-store marketing campaigns focus more on the needs of the shopper.

It is particularly important to make this distinction in recent times; with the rise of private label, decline in brand trust, and ‘loyalty to savings’ all contributing to a rise in importance of in-store marketing. Indeed, opportunities exist through shopper marketing not only to drive brand switching at the fixture, but to encourage shoppers to consider items that wouldn’t otherwise feature in their repertoire.

The Role of Shopper Marketing

Perhaps the most common form of in-store marketing is price promotion. In our survey of 1,397 UK grocery shoppers (June 2010), we found that 75% now say price is an important factor that influences them to buy the the brands they do. Nearly half of all brands in shoppers’ repertoires are only bought when on promotion! Price is rated as more important to shoppers than brand trust and heritage when deciding which brands to purchase.

 

Despite this, our survey also finds that recent price promotions have encouraged just 30% of UK main shoppers on average to try brands they wouldn’t normally consider. Moreover, only 40% of these then say they are likely to continue to buy those brands once the promotion ends.

In essence, our findings suggest a high degree of brand switching by shoppers within their existing repertoire in response to price promotion, yet a relatively low amount outside it. And where promotions do encourage shoppers to try things they wouldn’t normally consider, they are unlikely to remain loyal once the promotion has ended.

Beyond Discounting

Of course, effective shopper marketing that influences purchasing decisions and activates brand loyalty, extends beyond discounting. Indeed, the best shopper marketing campaigns seek to build emotional brand loyalty with shoppers at the fixture - these types of initiatives range from simply differentiating your brand through quality and performance on packaging; to free gifts, in-store sampling and competitions; through to sponsorships, charitable tie ups and reinforced health and ethical credentials.

We asked our survey participants to choose which of these initiatives would be likely to make them consider a brand they wouldn’t usually. And the results demonstrate a reasonable degree of shopper interest, with NPD, loyalty points and packaging faring particularly well.

Packaging for example is of particular importance from the shopper perspective since it is the primary method of engagement with them in–store. It effectively relates the balance between emotional and rational brand loyalty as it seeks to engage the shopper from both an aspirational and functional perspective. Shoppers pass judgements and make decisions about most packaging in just a few seconds; as the look, touch and feel instantly communicates key information to the shopper that enables them to make their decision.

Interest across the different shopper marketing initiatives presented is, to be fair, lower than price promotion for all but the top three. But nevertheless, these are encouraging figures across the board, since these initiatives are generally accepted to be stronger when it comes to fostering true brand loyalty in the longer term.  

Consider your category

Of course, the suitability of these different stimuli actually varies by category. Fortunately, due to the nature of our research we are also able to analyse appeal among shoppers on a per category basis.

High level analysis suggests for example that coffee shoppers are consistently least likely to respond to in-store marketing that seeks to encourage them to try brands outside their repertoire. Shampoo shoppers are notably more likely to respond to packaging than other initiatives, while lager shoppers are more likely to respond to discounting and displays.

These differences essentially reflect the degree of brand loyalty at the fixture for different categories - special offers and displays are typically more suited to driving brand switching among categories with relatively low loyalty, while differentiation through packaging and communication of benefits is generally more effective for categories with higher loyalty and smaller repertoires.

In summary, when considering the best approach to in-store marketing, manufacturers should consider the nature of their category, in particular the average size of shopper repertoire and degree of fragmentation at the fixture.

Evolution Insights’ research investigates brand loyalty and repertoire across a range of different grocery categories, presenting the key drivers of brand choice and loyalty among shoppers. Our off-the-shelf reports present detailed insight into the role of promotions, range rationalisation, private label and a variety of shopper marketing initiatives on brand repertoire, at a category specific level.

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