Customer loyalty is crucial for both product brands and retailers. But in an era where stores often delist products to cut down on overhead, loyalties sometimes conflict.
For example: a mom may love to shop at one particular store in her neighbourhood. But how far does her loyalty go if two or three brands she loves are removed? Does she keep going to that store? Or does she look for another grocer more in tune with her brand preferences?
These were the questions asked in a recent study called “When Loyalties Clash: Purchase Behavior when a Preferred Brand is Stocked Out.” Researchers conducted surveys to determine consumers’ loyalty to either products or stores.
Survey participants were given a scenario in which their preferred store was out of their favourite brand of toothpaste or breakfast cereal. Then they were given a choice: choose another product from that store, or head to a different supermarket.
The results: Brand loyalty usually trumped store loyalty, says Sanjay Puligadda, a professor of marketing at Miami University in Ohio, and one of the study’s authors. “The extent of loyalty toward brands of breakfast cereal or toothpaste meant people were more likely to go to another store to get things.”
Consumers have an almost human-to-human link to brands, Puligadda says. They rarely have that sort of connection with stores. “Stores are a means to an end. People talk about their families and the brands they grew up with and the sort of bond they have with the brand.”
Bill Ross is a professor of marketing at the University of Connecticut. He co-authored the study and agrees that some consumers are highly involved with the brands they buy. But, he adds, this doesn’t necessarily apply to all consumers or to every product.
“It also could be that matters for some kinds of products and not others,” says Ross. “For saltine crackers, I’m not sure I care that much. But I know that my wife cares about Tide, because we’ve had a fight about it for years.”
Strong loyalty to products means store managers should tread carefully when they’re considering delisting, says supermarket industry consultant David Livingston.
“Sometimes retailers think they’re smarter than the consumer,” he says. “They try to tell what they want, instead of the other way around. That’s where they fail.”
While store loyalty may never be as strong as product loyalty, Ross says retailers that go “above and beyond” in other areas of customer service might be able to hold on to customers, regardless of delistments.
So what does “above and beyond” look like?
Ross points to a retailer from a very different sector as an example. “Barnes and Noble did a really cool thing when they put a coffee shop in their bookstores,” he says.
“The I go to has a little something like this, but I wonder if they went to a lot of trouble with it, would it affect people’s loyalty to that store? I could get a good cup of coffee, play with my laptop, get a nice bagel, then go do my 40-item shopping list.
Would that be more attractive to me than what a straight grocery store is offering?” Perhaps, he muses. No matter which brand of saltines is in stock.