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Loyalty and Brands - UK - April 2016

Published By :

Mintel

Published Date : Apr 2016

Category :

Lifestyle

No. of Pages : N/A

The differences in building and measuring loyalty across different sectors mean that brands must take a nuanced approach to fostering a connection with customers. Bigger brands with more exposure tend to have an immediate advantage in building favouritism; however, recent arrivals such as Netflix show that new brands, particularly those in digital markets, are capable of entering the market and competing from the off.

Table of Content

Overview

What you need to know
Report scope

Executive Summary

Big brands dominate
Figure 1: Top 10 brands, by total usage, January 2014-March 2016
Figure 2: Top 10 brands, by usage in the last 12 months, January 2014-March 2016
Digital lifestyles influence frequency of usage
Figure 3: Top 10 brands, by usage described as “All the time” by users, January 2014-March 2016
Amazon the standout performer on favouritism
Figure 4: Top 10 brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Brands with high commitment drive usage in the last year
Figure 5: Proportion of brand commitment (agreement with “This is a favourite brand” or “I prefer this brand over others”), by proportion of total users who have used in the last year, January 2014-March 2016
Less of a pattern when it comes to frequent usage
Figure 6: Proportion of brand commitment (agreement with “This is a favourite brand” or “I prefer this brand over others”), by proportion of total users who describe their usage as “All the time”, January 2014-March 2016
Aspirational categories can drive commitment without active engagement
Energy and service providers rely on inertia
What we think

Brand Loyalty Overview – What You Need to Know

Big brands dominate on usage
Digital lifestyles influencing most frequently used brands
Brand favouritism and commitment generally reflect usage
Strong correlation between usage in the last year and commitment…
…but little correlation between commitment and high-frequency usage

Brand Usage

Size matters
Figure 7: Top 10 brands, by total usage, January 2014-March 2016
Popular brands stay popular
Figure 8: Top 10 brands, by usage in the last 12 months, January 2014-March 2016
Digital lifestyles influence frequency of usage
Figure 9: Top 10 brands, by usage described as “All the time” by users, January 2014-March 2016
Some categories open to lapsed users
Figure 10: Top 10 brands, by lapsed users, January 2014-March 2016

Favouritism and Commitment

The power of emotion
Amazon the standout performer
Technology habits drive favouritism
The giants of CPG benefit
Figure 11: Top 10 brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Food brands attract more casual preference
Proof that Apple fanboys exist
Figure 12: Top 10 brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
Figure 13: Proportion of brand commitment (agreement with “This is a favourite brand” or “I prefer this brand over others”), by brand favouritism (agreement with “This is a favourite brand”), January 2014-March 2016

Where Usage and Favouritism Meet

General correlation between usage in the last year and commitment
Figure 14: Proportion of brand commitment (agreement with “This is a favourite brand” or “I prefer this brand over others”), by proportion of total users who have used in the last year, January 2014-March 2016
Lower correlation between frequent usage and commitment
Figure 15: Proportion of brand commitment (agreement with “This is a favourite brand” or “I prefer this brand over others”), by proportion of total users who use “All the time”, January 2014-March 2016
Loyalty differs by sector
Figure 16: Consumer perceptions of how well different firms reward loyalty, December 2015

Sector Review – What You Need to Know

Low emotional connection in finance markets, despite high involvement in consumer lifestyles
Low engagement with travel brands means few opportunities to build loyalty
Technology service providers can lock consumers in, but new entrants apply pressure
Major food and drink brands drive greater favouritism
Automotive and fashion represent more aspirational categories
Energy sector defined by inertia
Function beats glamour in building preference in BPC markets
Newspaper brands are tribal and divisive

Finance

Finance brands often criticised
Insurance brands face an even tougher task to build loyalty
Figure 17: Factors influencing insurance purchases, September 2015
Low favouritism reflective of lack of financial services glamour
Figure 18: Top 10 financial services brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Niche proposition can add favouritism to finance brands
Heritage built in other sectors assists Post Office and AA
Figure 19: Top 10 finance brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
Figure 20: Statements associated with purchasing, by method of purchasing car insurance, December 2015
High street banks earn high frequent usage
Figure 21: Top 10 financial services brands, by usage described as “All the time”, January 2014-March 2016
Supermarket brands offer more visible rewards for loyalty
Certain credit card brands perform better than the category itself
Comparethemarket.com promotions influence perception of loyalty
Figure 22: Top financial services brands, by agreement with “A brand that rewards loyalty”, January 2014-March 2016
Lack of heritage holds supermarket banking brands back
Figure 23: Brand commitment, by agreement with “A brand that rewards loyalty”, January 2014-March 2016
Traditional inertia to switching bank accounts may be changing
Change in cost of Santander 1|2|3 account leaves door open for other brands to step in
Churn within insurance sector evident
Figure 24: Top 10 brands, by lapsed users in the finance sector, January 2014-March 2016

Retail

Amazon is a standout brand
Figure 25: Top 10 retail brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Online-only retailers impact market
Figure 26: Top 10 retail brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
Online set to become a bigger factor
Figure 27: Which shopping locations are being used more or less compared with a year ago, April 2015
Location influences decision-making in supermarket category
Figure 28: Factors in choosing where to shop, August 2015
Supermarkets dominate category on frequent usage
Niche retailers also keep customers coming back
Figure 29: Top 10 retail brands, by usage described as “All the time”, January 2014-March 2016
Loyalty schemes encourage a third to spend more
Tesco’s Clubcard is a strength
Figure 30: Agreement with “A brand that has a strong loyalty scheme”, September 2014
Discounters influence shift towards EDLP
Type of retailer influences lapsed users
Figure 31: Top 10 brands, by lapsed users in the retail sector, January 2014-March 2016

Travel

Loyalty schemes in travel sector favour the bigger spenders
Full-service airlines stand out
Figure 32: Top 10 travel brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Premium airlines foster greater preference…
…while accessible hotels are preferred to exclusive ones
Figure 33: Top 10 travel brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”)
Low usage limits opportunities for travel brands to engage
Figure 34: Top 10 travel brands, by usage described as “All the time”, January 2014-March 2016
Loyalty increases with frequency of trips
Figure 35: Levels of holiday brand preference, April 2015
Sporadic travel brand usage means high proportion of lapsed users
Figure 36: Top 10 brands, by lapsed users in the travel sector, January 2014-March 2016

Technology Service Providers

Contracts create an environment for engagement
Content is king
Figure 37: Top 10 technology services brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Sky has potential to expand further
BT lags behind Sky
Figure 38: Top 10 technology service provider brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
TalkTalk usage based on locked-in customers
Figure 39: Top 10 technology service provider brands, by usage described as “All the time”, January 2014-March 2016
Streaming services instilling loyalty
O2 best placed of mobile network providers
Figure 40: Top 10 ranking of technology service provider brands, by agreement with “A brand that instils loyalty”, January 2014-March 2016
Low proportion of lapsed users highlights inertia
Figure 41: Top 10 brands, by lapsed users in the technology services sector, January 2014-March 2016

Food

Own-label is a key factor across many food categories
Figure 42: Types of own-label and branded products bought, September 2015
Major food brands are favoured
Figure 43: Top 10 food brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Chocolate category has less of an own-label influence
Figure 44: Top 10 food brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
Seasonal food brands suffer on frequent usage
Chocolate eaters likely to switch brands, crisps eaters less so
Genius creates frequent usage among select group
Figure 45: Top 10 food brands, by usage described as “All the time”, January 2014-March 2016
Own-label food and drink brands lack favouritism…
Figure 46: Favouritism and commitment shown towards own-label food and drink brands, September 2014
…but frequency of usage remains relatively high
Figure 47: Ranking of own-label food and drink brands, by usage described as “All the time”, January 2014-March 2016
Tired and boring brands struggle to maintain usage
Figure 48: Top 10 brands, by lapsed users in the food sector, January 2014-March 2016

Foodservice

Coupons provide short-term enticement but could damage true loyalty
Quality more important than loyalty schemes for coffee shops
Figure 49: Factors influencing where hot drinks are purchased out of home, September 2015
Proven consistency creates favouritism among foodservice brands
Figure 50: Top 10 foodservice brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Figure 51: Top 10 foodservice brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
Few foodservice brands visited frequently
Some smaller foodservice brands have loyal followings
Harris + Hoole takeover offers chance to capitalise on frequent usage
Figure 52: Top 10 foodservice brands, by usage described as “All the time”, January 2014-March 2016
Pubs and restaurants suffer a greater proportion of lapsed users
Restaurant brands hit by increase in competition
Figure 53: Top 10 brands, by lapsed users in the foodservice sector, January 2014-March 2016

Automotive

Consumers align themselves with aspirational car brands
Figure 54: Top 10 automotive brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Volkswagen commitment holds up despite scandal
Figure 55: Top 10 automotive brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
Frequent usage not dependent on preference
Figure 56: Top 10 retail brands, by usage described as “All the time”, January 2014-March 2016
Aspiration in the car category increases churn
Changing family status changes customer needs
Figure 57: Top 10 brands, by lapsed users in the automotive sector, January 2014-March 2016

Drink

Own-label less of a factor in drinks sector
Range of drink categories represented
Figure 58: Top 10 drink brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Brands with wider appeal in top 10 for brand commitment
Figure 59: Top 10 drinks brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
High sugar content limits regular usage
Diet Coke earns as much frequent usage as Coca-Cola
British love for tea and coffee shines through
Figure 60: Top 10 drinks brands, by usage described as “All the time”, January 2014-March 2016
Alcoholic drinks brands dominate lapsed user list
Figure 61: Top 10 brands, by lapsed users in the drinks sector, January 2014-March 2016

Energy

Energy brands struggle to create much positivity…
Figure 62: Comparison of brand satisfaction for energy brands and average across all brands, January 2014-March 2016
…yet few switch provider
British Gas dominates
Figure 63: Favouritism and commitment towards energy provider brands, July 2015
Frequent usage high among bigger brands
Figure 64: Top energy provider brands, by usage described as “All the time”, July 2015
Inertia evident within the energy sector
Figure 65: Proportion of lapsed users in the energy provider category, July 2015

Beauty and Personal Care

Functionality beats glamour on favouritism
Male grooming brands on the rise
Figure 66: Top 10 BPC brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Biggest brands in their categories earn wide appeal
Figure 67: Top 10 BPC brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
Gillette and Colgate earn high frequent usage too
Niche BPC brands create reason for frequent usage
Figure 68: Top 10 BPC brands, by usage described as “All the time”, January 2014-March 2016
Branded chosen over own-label in most beauty categories
Figure 69: Usual brand preferences of beauty products, December 2014
Boots No7 the standout
Figure 70: Brand favouritism and commitment towards own-label beauty brands, January 2014-March 2016
Niche brands struggle to maintain customers
Figure 71: Top 10brands, by lapsed users in the beauty and personal care sector, January 2014-March 2016

Media

Readership of magazines and newspapers in decline
Newspapers’ political stances ensure more tribal loyalty
Daily Mail online content cements favouritism
Figure 72: Top 10 media brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Newspapers are divisive
Figure 73: Top 10 media brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
The Times’ paywall results in lower usage than favouritism suggests
Niche Men’s Health has more frequent readership than level of commitment shown
Figure 74: Top 10 retail brands, by usage described as “All the time”, January 2014-March 2016
Magazines have higher proportion of lapsed readers
Figure 75: Top 10 brands, by lapsed users in the media sector, January 2014-March 2016

Technology Products

Ecosystems could help create inertia to switching
Figure 76: Reasons for choosing smartphone owned, November 2014
Google and Apple have a real advantage
Figure 77: Top 10 technology product brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Apple promotes strong emotions
Google has potential to extend its influence
Figure 78: Top 10 technology brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
Constant interaction with devices drives high frequency of brand usage
Figure 79: Top 10 technology brands, by usage described as “All the time”, January 2014-March 2016
Users also loyal to operating systems
Figure 80: Favouritism and commitment within operating system brands, January 2014-March 2016
Brands must maintain reputation for innovation
Premium headphones brands struggle to maintain user base
Figure 81: Top 10 brands, by lapsed users in the technology product sector, January 2014-March 2016

Fashion

Fashion dependent on exclusivity
Lack of engagement and similar proposition limits favouritism
Figure 82: Top 10 fashion brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Premium fashion brands create commitment without active engagement
Figure 83: Top 10 fashion brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
Despite low usage, Rolex performs strongly across metrics
Figure 84: Top 10 fashion brands, by usage described as “All the time”, January 2014-March 2016
Exclusivity limits high proportion of lapsed users
Figure 85: Top 10 brands, by lapsed users in the fashion retail sector, January 2014-March 2016

Household

Own-label affects loyalty towards brands in some household markets
Figure 86: Branded versus own-label product purchasing for household care products, April 2015
Fairy’s performance particularly impressive
Yankee Candle adds glamour to functional category
Figure 87: Top 10 household care brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Branded washing-up liquids seen as more effective
Dyson benefits from style and reach
Figure 88: Top 10 household care brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
Niche household brands have small band of loyal followers
Figure 89: Top 10 household care brands, by usage described as “All the time”, January 2014-March 2016
Lack of upbeat brand image causes customer drift
Figure 90: Top 10 brands, by lapsed users in the household care sector, January 2014-March 2016

Home

Brand important in choice of next fridge
Figure 91: Factors influencing choice of next fridge, January 2015
Pyrex follows up high level of trust with strong favouritism
Figure 92: Top 10 home brands, by agreement with “This is a favourite brand”, January 2014-March 2016
Le Creuset’s lifetime guarantees promote commitment
Figure 93: Top 10 home brands, by commitment (net agreement with “This is a favourite brand” and “I prefer this brand over others”), January 2014-March 2016
White goods regularly used
Figure 94: Top 10 home brands, by usage described as “All the time”, January 2014-March 2016
Smeg’s lower recommendation ties in with fewer repeat purchases
Figure 95: Top 10 brands, by lapsed users in the home sector, January 2014-March 2016

Factors Influencing Loyalty – What You Need to Know

Consumer attitudes are different to behaviour
Other factors come into play
Energy and finance sectors lack reputation for customer service
Some brands used on basis of necessity rather than experience

Trust in Brands

Correlation between trust and commitment…
Figure 96: Agreement with “A brand that I trust”, by commitment, January 2014-March 2016
…but trust does not necessarily determine frequent usage
Figure 97: Agreement with “A brand that I trust”, by users who describe their usage as “All the time”, January 2014-March 2016

Brand Differentiation

Consumers align themselves with differentiated brands…
Figure 98: Perceived differentiation, by commitment, January 2014-March 2016
…but little difference when it comes to frequent usage
Figure 99: Perceived differentiation, by users who describe their usage as “All the time”, January 2014-March 2016

Customer Service

Accessibility influences link between customer service and commitment
Figure 100: Perceived great customer service, by commitment, January 2014-March 2016
Little link between customer service and frequent usage
Figure 101: Perceived great customer service, by users who describe their usage as “All the time”, January 2014-March 2016

Brand Satisfaction

Few brands have satisfaction of lower than 50%
Figure 102: Positive satisfaction (net of “good” or “excellent”), by commitment, January 2014-March 2016
Energy sector is an outlier
Figure 103: Positive satisfaction (net of “good” or “excellent”), by users who describe their usage as “All the time”, January 2014-March 2016

Brand Recommendation

Inertia even influences brands with lower likely recommendation
Figure 104: Recommendation, by commitment, January 2014-March 2016
Concern for Vodafone and TalkTalk
Figure 105: Recommendation, by users who describe their usage as “All the time”, January 2014-March 2016

Cross-category Comparison – What You Need to Know

Aldi and Lidl growth not just based on price
While still cautious, more consumers are ready to engage with finance brands once more
Preference and usage of technology brands still on the rise
iOS benefiting from increasing influence of operating systems

Aldi and Lidl Increasing Emotional Bond

Shift in supermarket preference
Figure 106: Proportion of users who describe their usage as “All the time”, August 2012-August 2015
Change in habits not solely linked to price
Figure 107: Brand commitment (agreement with “This is a favourite brand” and “I prefer this brand over others”) shown towards supermarkets, August 2012-August 2015

Finance Brands: Re-engaging with Consumers

Increase in trust reflected by increase in commitment
Banking brands showing promise…
…but it is taking longer for some
Figure 108: Brand commitment shown to selected high street banks, January 2012-November 2015
Upturn in fortunes not limited to banking brands
Figure 109: Brand commitment shown to selected price comparison websites, April 2012-May 2015
Insurance brands also increasing proportion of commitment
Figure 110: Brand commitment shown to selected insurance specialists, January 2012-November 2015

Technology Users Bound to Their Devices

Technology changing attitudes towards brands
Figure 111: Apple and Samsung brand favouritism and commitment, November 2011-November 2015
Frequent usage also increasing
Figure 112: Usage of Apple and Samsung described as “All the time”, November 2011-November 2015
Operating systems become as important as handsets
iOS benefiting the most
Figure 113: Operating system favouritism and commitment, December 2013-November 2015

Appendix – Data Sources, Abbreviations and Supporting Information

Data sources
Abbreviations

Appendix – Brands Covered

List of Table

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