Shopper Digest: Are Shoppers Never Loyal?
When we hear the word loyalty, it often brings to mind qualities such as trust, commitment, and unwavering support. It signifies strong relationships between friends, family, or partners who stand by each other through both good times and challenges. While this evokes a sense of warmth, loyalty takes on a different meaning in consumer behaviour. Here, it reflects a shopper’s commitment to a brand, demonstrated through repeat purchases, emotional attachment, and advocacy. Loyalty is not just a habit; it is a deliberate choice driven by perceived value and a connection to the brand. Yet even this form of loyalty comes with its own challenges.
Typically, as brands expand to become more mass-market, they often experience a paradoxical decline in consumer loyalty. Wider availability and lower price points can dilute a brand’s exclusivity and emotional appeal. Competing on price and convenience also makes it easier for shoppers to see brands as interchangeable, opting for cost savings rather than genuine allegiance. While repeat purchases may increase due to convenience or affordability, true loyalty means consciously choosing a brand even when alternatives are cheaper or more accessible.
This raises an important question: How can brands sustain loyalty in an increasingly commoditised and competitive market?
Take the example of Brands A, B, C, and E, which follow the typical pattern of growing penetration but declining spending loyalty. Brand D, however, stands out by increasing both penetration and loyalty. This raises critical questions for brands: should they focus on niche markets with fewer but highly loyal shoppers, or target a broader audience of heavy shoppers who buy more but are less loyal?
Heavy shoppers are crucial, as they use the category more frequently, driving volume growth. However, niche markets, while offering exclusivity and stronger consumer connections, come with a smaller shopper base.
Brand D has performed well by striking a balance and leveraging attractive promotions to grow both penetration and loyalty simultaneously. Over 70% of its volume now comes from promotions—a significant increase from 50% just two years ago. While this strategy has been successful for Brand D, it is not a one-size-fits-all solution. Promotions alone may not be the key to building loyalty for every brand. Instead, mass-market brands must find their own balance between investing in promotions and using media to deliver strong, clear messaging. Loyalty in the mass market is challenging to achieve, so the focus should shift to what truly matters.
The challenge of loyalty loss becomes even more pronounced as brands expand. A lack of differentiation, price sensitivity, and heightened competition make it increasingly difficult to retain shoppers. Mass brands often prioritise price, fostering price loyalty rather than emotional loyalty. To counter this, brands must focus on differentiation, create personalised experiences, and invest in loyalty programmes to enhance brand stickiness and strengthen long-term shopper relationships.
At Worldpanel, we measure two key metrics that help brands navigate these dynamics: Penetration and Loyalty. Penetration represents the percentage of people buying a brand within a given timeframe, highlighting its growth potential. Loyalty, on the other hand, measures the share of a shopper’s volume, trips, and spending allocated to a brand, revealing its importance in their baskets. With consistent four-week tracking, we provide insights into both metrics, enabling brands to better understand their performance and make informed decisions for sustainable growth.
Source: P6 2024 database, Worldpanel Malaysia