How Challenger Brands Gain, Keep Market Share During COVID-19 Crisis
About half of consumers continue to stock up on essential items, with 78% acknowledging that it makes them feel safer. To 85% of those Americans, brand names no longer matter as long as they find the toilet paper and hand sanitizers and wipes.
The data comes from Shopkick, in a survey of more than 24,000 U.S. consumers. It aims to provide insights into behavioral and cultural changes in light of the current health and economic crisis.
If name brands no longer matter and consumers buy whatever they can find, what are the chances of them finding their new favorite? Can the brands with a loyal following in the past keep their customers in the future? Will the brands without the loyal following find new market share in the future?
“This can be largely driven by inventory and supply-chain availability issues in the present climate,” said Matthew Mierzejewski, SVP, search capability lead at Merkle. “Long-term, I don’t think this impacts the most notable brands, as they will regain share.”
He said these brands should use email and direct mail to remind them of their brand loyalty after the peak of the crisis subsides.
“The real opportunity is for challenger brands to gain their own loyalty with a great experience, and follow-up value proposition — be it price, speed, personalization, or other,” Mierzejewski said. “It speaks to more of an opportunity for challenger brands vs. a threat to large brands.”
Loyalty has always been a major element in keeping market share, but more so following this crisis.
“You need an emotional connection,” according to one expert who asked for anonymity. “People might have thought of the brands as transactional or a commodity, but they really need to stand out. They need to build a connection past the functional aspect.”
Emotional connections and loyalty go hand in hand, he said.
One of the major issues in terms of customers remaining loyal, at least at the moment, is that most consumers cannot get the items they are most accustomed to using — items such as toilet paper, 97%; hand sanitizer, 93%; disinfecting wipes, 91%; bottled water, 69%; medical items. 64%; and certain types of canned goods, 54%. Some 78% also report seeing store purchasing restrictions, such as limits on the number of specific items shoppers could buy.