Can customers stay loyal in the era of enormous brand choices?

If a Gen X consumer – a much older cohort than millennials and Gen Z – is tempted to switch her decade-old brand, imagine the churn brands face from younger consumers

For a decade, a south-Delhi based Gen X consumer picked a particular brand of shampoo in a big bottle that targets salons, for use at home. This way she didn’t have to replenish her hair wash product for the next six months. Gen X is the consumer segment aged between 45 and 60 years and the lady was happy with her choice of shampoo up until recently when her world opened up to new-age online brands of beauty and personal care. Now she’s testing new shampoos, hair masks and serums from different direct-to-consumer (D2C) brands available online and delivered home, often within minutes.

Can customers stay loyal in the era of enormous brand choices?

If a Gen X consumer – a much older cohort than millennials and Gen Z – is tempted to switch her decade-old brand, imagine the churn brands face from younger consumers. Truly spoilt for choice in categories such as beauty, personal care, food, beverage, fashion and lifestyle, brands are finding it tough to keep their consumers loyal.

“The more choices you have, commitment becomes more difficult,” said Anjana Pillai, partner at human insights firm Quantum. “Loyalty is no longer assumed to be lifelong”, she said at a recent webinar on reimaging loyalty for the Next Generation consumer, held by the Market Research Society of India. Creating brand loyal customers has never been easy but today it’s an uphill battle. “What we find is that loyalty is a renewable contract. You have to win it over and over again. It can’t be taken for granted, especially among the young,” Pillai said.

Besides, today, young consumers are most loyal to themselves. “That defines how they behave. They actually choose brands that help them construct their ideal self,” Pillai said.

Ketki Sitapati, general manager, CMI: Beauty & Wellbeing, South Asia at Hindustan Unilever, too, said consumers are moving from inertia to more active re-selection in every purchase. And loyalty is no longer just about product, price or availability. Rituparna Dasgupta, EVP, network research and insights at Zee entertainment Enterprises Ltd agreed that quality, trust and consistency is basic hygiene to build customer loyalty. What consumers seek is a brand that is culturally and personally relevant to them, she said.

Customer retention is a challenge faced both by legacy as well as new-age online brands. While traditional brands must keep pace with evolving consumer needs, D2C brands have to build a market and create loyalty. Habit-based loyalty among legacy brands doesn’t guarantee continued success as any smart D2C brand can pull the rug beneath their feet, Pillai noted.

The marketing head of a large, traditional FMCG company said that consumer loyalty also depends on age, gender and the product category. Beauty and personal care have higher loyalty as people are wary of what touches their skin or hair. Also, women are more brand loyal than men who are naturally more flirtatious and experimentative, he said, declining to be named. “For legacy brands, the 16-24 age group is vulnerable as that’s when experiments happen. If traditional brands don’t have a portfolio to address their needs or don’t evolve, there’s a challenge,” he said. So large companies are either investing in startups or creating product extensions of their master brands to target the young.

An important building block to create loyalty is product experience. Marketers cannot afford to overpromise and underdeliver, said the marketing head

At research firms, loyalty studies aren’t just looking at repeat purchase. “We look at brand engagement, emotional attachment, sensorial excitement or whether a consumer is advocating the brand. These are more precious than saying I bought the brand 8 times out of my last 10 purchases,” Quantum’s Pillai said. “Brands must build repeated relatable experiences across occasions and not just focus on repeat purchase,” added ZEEL’s Dasgupta.

Often, the large sized legacy brands create a distance between themselves and their customers while the Next Gen consumer seeks intimacy. “Maverick D2C brands disrupt traditional codes. Some say I will show you a part of me that big brands won’t,” Pillai said. For instance, the clean-label nutrition brand The Whole Truth has changed the transparency game and put everything on the front label, she added.

At Hindustan Unilever, the building blocks of loyalty are what Ketki Sitapati describes as the six “Cs”. Chemistry or the visceral pull of a brand. Conversation or how you talk to your customer. Conviction or the confidence consumers have in your brand. Cause is what you stand for and Comfort comes from familiarity and nostalgia. Lastly, Chutzpah or courage which can be used to push the category norms.

Consumers of legacy brands cherish familiarity but still want their brands to evolve. For Clinic Plus, for instance, HUL keeps upgrading the stories around its tagline “meri beti strong”, Sitapati said.

Yet most brands are not doing enough to build loyalty. “Caught up in the monthly revenue, sales and discount game, they are stuck in a transactional relationship which is not going to win them long term conviction,” Pillai said.

To build loyalty, brands must understand their role in a consumer’s life and how they can participate in that journey, she added.