Marketers always want to know how customers want to engage with brands.
To better understand the shifting consumer-brand relationship, IBM conducted the 2014 IBM Consumer Products Study, which revealed some stunning revelations.
“We found that brand loyalty is no longer a relevant measure,” the study says.
When comparing two seemingly contradictory questions, “Do you consider yourself brand loyal?” and “Do you like to try new brands frequently?” both scored relatively high with consumers’ strongly agree or agree responses (46% and 39%, respectively).
“This tells us that consumer brand loyalty is fickle and no longer associated with repeat purchasing,” the study says. “In today’s world, consumers are loyal to newness. Expectations are high, while switching costs are low. This new research shows that consumer propensity toward brands is alive and well. A new class of “power consumers” brings a revitalized sense of passion and excitement for communicating, engaging, and sharing with brands. These consumers are predominantly young, rising spenders from growth markets around the world, yet they exist in every country, age bracket,
and income level. They are leapfrogging others in terms of technology adoption and embracing digital channels at an impressive rate.”
This group is willing to spend more and is rapidly becoming brands’ most powerful advocates and market researchers, the study cites.
“It is teaching us about a new set of rules of engagement and that brand loyalty is not dead,” the study says. “But this loyalty needs a new definition based on consumers’ desired level of engagement with brands: Based on these findings, we call it brand enthusiasm.”
Brand enthusiasm comprises three dimensions of consumer attributes:
Level of communication desired: Consumers’ openness to communicating with brand owners.
Willingness to provide input: Consumers’ sense of ownership relative to a brand’s innovation and activation activities.
Degree of comfort with sharing personal data: Consumers’ level of trust in allowing brands to utilize their personal information.
According to the study, there are four consumer clusters based on brand enthusiasm:
Brand Enthusiasts: 25% of study population: The next generation of growth market spenders. With very high propensity for individual recognition and two-way engagement, Brand Enthusiasts have a high emotional connection with brands and a higher willingness to pay for products with premium features (for example, greater health and wellness benefits. Nearly three-quarters of Brand Enthusiasts are from growth markets and represent 47% of the high and affluent income population in those countries. More than half are millennials aged 18 to 35.
Brand Ambivalents: 36% of study population: The battlefield for growth. Brand Ambivalents are consumers with overall positive views toward brands, but they are somewhat reluctant to engage. Nearly half answered “neutral” to questions about whether they had an emotional connection to brands, suggesting this group may be open to influence and establishing a deeper bond. By far the largest cluster at 36% of the sample size, Brand Ambivalents represent roughly equal parts of both growth and traditional markets (58% and 42%, respectively).
Product Purists: 25% of study population: Older, traditional market consumers who prefer products that are locally made. Product Purists have some desire to be recognized and catered to by brands, but not engaged. They have a preference for locally made or manufactured products. Seventy-three percent of Product Purists are from traditional markets, and almost half are aged 55 and over (47%).
Disassociated Shoppers: 14% of study population: Price sensitive, traditional market boomers who want to be left alone. Disassociated Shoppers have very low preference for being identified or engaged. They are extremely price sensitive and exhibit little to no emotional association with brands. Similar to Product Purists, nearly three-quarters of Disassociated Shoppers are traditional market consumers (72%), and 46% are aged 55 and over.
The study says that the clusters represent two important age groups: Product Purists and Disassociated Shoppers are comprised primarily of older baby boomers, while Brand Enthusiasts and Brand Ambivalents mostly represent the rising millennial generation. Although the aging population is a critical (and valuable) market, millennials are clearly setting the pace for the future
“The consumer-brand dynamic has fundamentally changed and will continue to evolve at a rapid pace,” the study concludes. “To effectively cater to consumers in today’s digital, omni-channel world, FMCG companies need to build brand enthusiasm, not just brand loyalty or repeat purchases. Organizations need to continuously respond and adapt to the 
changing needs and demands of the consumer, because the future will be on their terms. Most consumers are open to sharing, communicating and contributing directly with manufacturers; indeed, this is rapidly becoming an expectation. Brands have an open platform to do so through digital and mobile channels and can no longer afford to be one step removed from the consumer. The journey is just beginning, and it’s anyone’s game.”