Shopper loyalty is somewhat of a ‘white whale’ to retailer brands. It is something we continue to strive for but absolute loyalty to one brand is very hard to achieve. If brands accept that they just can’t retain all the shoppers that buy their products in a given year, and instead focus on taking measures to mitigate a product swap, they may have a better chance at achieving growth, writes Andrew Eagle, Senior Client Manager at NIQ.
However, leading brands continue to pursue more loyal customers. This is encouraged through a range of methods, from gathering data to gain a better understanding of shoppers and personalise offers to them to connecting with shoppers’ values and delivering products to match these. Brand loyalty is also driven through creating engaging and rewarding experiences to keep the brand front of mind, while also ensuring availability, so that customers have easy access to the product they want when they want it.
Increasingly FMCG brands look to generate interest by entering into partnerships with brands which have no pre-existing link to their message. This is not something especially new, I remember as a child enthusiastically consuming bowl after bowl of Shreddies, hoping to acquire all six of the miniature “Back to the Future” comics to learn what happened in the film. These days partnerships tend to be less inclined to come in the form of a free giveaway but are more likely to be a complementary pairing of brands.
A celebrity boost
In the Beer, Wine and Spirits (BWS) category, we’ve seen a number of successful partnerships. This includes celebrity deals, such as Benchmark Drinks’ collaboration with singer and actress Kylie Minogue. While she hails from Australia, the wine which bears her name originates from France, making for an intriguing combination. Kylie’s wine has achieved impressive annual sales exceeding £11m with Kylie’s Rosé varieties consistently performing well, with the top seller experiencing a remarkable 30% growth in a declining market.
While it is not possible to say exactly why the brand has proven to be successful, we can look into the metrics, compare with the parent category and identify what factors are different in driving performance. We found that nearly three-quarters of the best-selling variety’s sales were driven by promotions, a significant increase compared to the category’s average of 47%. This suggests that the partnership effectively entices new shoppers to try the wine when it’s on promotion and encourages existing customers to become more loyal buyers.
Tapping into fandoms
One key learning for FMCG brands is also the success that toy brand Lego has achieved through its partnerships with popular franchises like Harry Potter, Star Wars, and Marvel. By creating product lines that tap into these fandoms, Lego has expanded its customer base beyond the traditional demographic. Their strategic partnerships have played a key role in driving brand value, which has soared from $5.4 billion in 2015 to an estimated $11.8 billion by the end of 2022.
And we cannot ignore the fandoms generated by popular social media influencers either. The recent launch of Prime energy drink is a good example of a pair of influencers fronting a product that appeals massively to the demographic that are heavily bought into their personal brand. Despite being 80% owned by Congo Brands, the product has seen strong initial sales, breaching the £50m mark. However, the brand will need to work harder to sustain demand beyond this viral interest so that Prime can break into the mainstream energy drink market long term, alongside major players like Lucozade, Monster, and Red Bull.
While commercial partnerships may not be appropriate for every brand, they certainly have the potential to help improve performance if applied properly. Important factors to consider include promoting increased sampling as a result of interest in the partner brand and engendering improved loyalty relative to the category. Creating seasonal variations – where appropriate – to celebrate events connected to the partner brand can also help as well as increasing the effectiveness of promotions as a sales driver.
As we continue to see a rise in influencer culture we can expect to witness a similar rise in commercial partnerships in the years ahead. Standing out on the shelf has become increasingly crucial for brands, especially in categories where products often appear strikingly similar. In such cases, a captivating partnership can make all the difference.
Understanding the demographics and interests of key shoppers is essential for brand owners to determine which commercial partnership has the potential to deliver a solid return on investment. And whether you may be looking to partner with a celebrity or not to drive awareness and growth, one vital component to any brand is data and insight – which can help identify the most effective strategies for brand growth. It’s important to keep this in mind and take appropriate action when looking to expand and grow.
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