Personal Values Top List Of Brand Loyalty, IBM Reports
One-third of all consumers stop buying their preferred products if they lose trust in the brand, and one-third of consumers stopped purchasing their long-time favorites in 2019.
IBM’s study–Meet The 2020 Consumer Driving Change–on global consumer trends reveals that the importance of brand purpose surpasses cost and convenience for today’s shoppers. The research, created in partnership with the National Retail Federation (NRF), polled nearly 19,000 consumers from 28 countries across all demographics and generations, from Gen Z to Baby Boomers to understand how individual purchasing decisions continue to evolve.
The findings reveal major shifts in consumer buying behaviors that require a fundamental change in how retailers and consumer packaged goods brands build relationships with consumers. Consumers will pay much higher prices for products that align with their personal values.
On average, 70% of purpose-driven shoppers pay an added 35% up front for sustainable purchases such as recycled or eco-friendly goods. Some 57% said they would change their purchasing habits to help reduce negative environmental impact. And 79% said it is important for brands to provide guaranteed authenticity — for example, certifications — when they are purchasing goods. Of these, 71% said they would pay 37% more to companies offering full transparency or traceability, wanting to know where and how products are made.
Convenience is also high on the list of an easy shopping experience — how to make life simple. While 86% of respondents say stores must have an assortment that fits their lifestyles, 84% said it’s important they can find what they need to get in and out of the store fast.
Awareness of new shopping technologies is generally above 90%, which shows that consumers will experiment with the latest tools such as visual and voice search.
Some 71% of respondents already use or want to use visual search, followed by 69% who use or want voice search options. However, none of the search methods have become popular. Only voice search is above 35% trial rates.
Most of the consumers surveyed fell into two groups: those who lead with their wallets, and those who consume with their values. Some 41% cited the importance of brand trust, which makes them value-driven consumers.
The highest concentrations of value-driven consumers are found in North America, Northern Europe, Japan, Korea, and China. Fifty percent of this group report that they have middle- or below-middle-income status.
Some 40% of consumers participating in the survey are purpose-driven and willing to pay a premium for products and services that align with their values and lifestyle. Purpose-driven consumers are also willing to change their shopping habits to reduce environmental impact and care about issues such as sustainability and recycling.
Most are in Europe, and parts of Southeast Asia and Latin America while some 51% are middle or above middle income.
The 13% who are brand-driven have the highest average income compared with other groups, meaning that they shop and spend more.
Brand-driven consumers want it all and are highly engaged in shopping and willing to pay a premium for assortments that fit their lifestyle. India, parts of the Middle East, and Latin America have the highest concentration of these consumers. Overall, 37% of brand-driven consumers say they have above-middle income.
The 6% who are product driven are less engaged in shopping overall and are not tied to any brand or product attribute. Rather, our findings lead us to conclude that the product-driven consumer relies on research for nearly every new product purchase.
However, it’s not just about price — these consumers are willing to pay a premium for transparency that vouches for product authenticity. Some 51% identify as earning below-middle income.