3 Ways Consumer Loyalty Shifted in 2020
In reflecting on 2020, there are a few obvious major themes, one of which is: change. So many aspects of our daily routines, from the places we went to the people we saw, were suddenly thrown into upheaval. It’s no wonder, then, that consumer habits also shifted dramatically.
The largest and most obvious shift came from the increase in digital shopping. In the past few years, the trend toward online shopping was already strong, and the unique circumstances of 2020 drove growth even more sharply. The year also saw a big uptick in consumer spending on essential products, as well as sanitation products like cleaning supplies and hand sanitizer. But there is another big change in consumer habits that doesn’t seem as inevitable as the other shifts: switching brands (read more about these shifts here: https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-great-consumer-shift-ten-charts-that-show-how-us-shopping-behavior-is-changing#).
Brand loyalty is an integral part of any consumer product. Converting a new customer is significantly more costly than maintaining a current customer in just about every industry. So what were the primary factors that brought about this collapse in brand loyalty? Read on to learn about three of the key aspects that drove consumers to change brands and the ways Dion can help you win those customers back and create new brand loyalists.
1. Value
Last year many of us found ourselves contemplating and perhaps reconsidering the things we value. While the question of value may have been philosophical at times, most people also likely found themselves looking at value in more concrete terms. Consumers increasingly began to think “how much is this product really worth to me and my family?”
Of course, a large portion of a consumer’s perceived value of your product comes from it’s cost, and premium products did see somewhat less growth than value and mass products, according to McKinsey’s research on the topic. But consumer psychology is complex, especially during times of transition, and perceived value is based on more than just price.
You as a company must have a strong sense of who your buyers are and what’s important to them if you want to re-engage a customer who switched brands because they wanted a better value. It’s essential to use your marketing, labels, and packaging to convey the value you actually provide to customers that goes beyond price. If you are a personal care brand whose mission is to help people achieve healthier skin through natural ingredients, make sure your labels and packaging communicate that straightforwardly to customers through conscious design choices. If you are an industrial product that can transform a living space into something more aligned with a person’s ideal, say that clearly with your label and marketing choices.
Regardless of your specific industry or product, if you don’t know your customers, or worse, what value you provide for them, you are extremely unlikely to win back customers or create loyalists. And if consumers can’t easily determine your value through your labels and packaging, they aren’t likely to become loyal customers, if they ever try your product at all. Make sure you are demonstrating your value to customers right away with a superior quality, high-impact label from Dion.
2. Health Considerations
Health considerations played a huge role in just about everything consumers did in 2020, from driving actual purchases of products like sanitizing wipes, soaps, and masks to making people reconsider their health and well-being from an entirely new prospective.
Many shifts in brand loyalty were due to this newfound perspective, and it’s important to remember that when we talk about health in this context, we mean far more than a narrow definition that includes the standard OTC pharmaceutical and supplement products. The idea of ‘well-being’ expanded and gained much ground in 2020, and things to promote well-being could include anything from food and personal care items to puzzles and games that helped to pass time at home.
On CBD from Herb Tech Pharmaceuticals understand that the term 'health' now encompasses more than just an absence of illness with their line of CBD lotions like 'Be Empowered'
Trust was an integral factor that colored consumer decisions about what products they considered healthy and hygienic and therefor worthy of their purchase. One of the most important features of building consumer loyalty is, of course, establishing and maintaining trust, and earning that trust became a much taller order in 2020. Being authentic, open, and transparent are the most important ways brands can gain or re-gain consumer trust going forward.
One easy way you can use your label and packaging to establish trust is with informative graphics. Informative graphics quickly communicate your internal processes that demonstrate your commitment to health and safety (think Certified Organic or UL logos), or you can use them to list specific health benefits consumers can expect (think “calming” or” energizing” icons). We have an entire article dedicated to the various ways your label can help you achieve your goals around transparency here if you’d like to learn more.
3. Availability
The events of 2020 caught all of us off guard. No one expected retailers to have to shut their doors a few months into the year, some never to open again. Consumers didn’t expect to find themselves having to weigh health considerations each time they made a decision to leave their home. Given the shock of the unexpected circumstances then, it’s no wonder many brands found themselves unprepared. Some companies weren’t ready to transition from a physical in-store selling platform to a digital one, and some weren’t prepared for a sharp increase in demand. Unsurprisingly, product availability was one factor that may have caused consumers to change brands.
Regardless of whether your product was unavailable due to store closures or because it was one of the essential items that were flying off the shelves at breakneck pace, if a brand loyalist was unable to find your product, they almost certainly purchased something comparable from another brand. As far as winning back customers who changed brands because of product availability, this one may feel like it’s out of your control. If a customer finds they prefer the new product, they may never return to your brand; on the other hand, they may just be waiting for the day they can finally repurchase from you. However, if you create a quality product and implement the tips listed above about using your label to communicate your value proposition and your benefits to well-being, you’ll be well on your way to building (or re-building) those brand loyalists.
Brand loyalty is the holy grail for pretty much all companies, from legacy brands to start ups. If 2020 found you somewhat unprepared and you experienced an upheaval in customer loyalty, you are not alone. Adaptability was the name of the game last year, and we expect we’re going to have to continue adapting in the future in this fast-changing world. Make sure you’re working with a label supplier who can support you through all the changes that are thrown your way. Request a free quote today and we’ll get to work helping you find and keep those brand loyalists!
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