By THE NATION
Nielsen’s Global Consumer Loyalty shows that consumers are actively on the lookout for new brands as the risk of buying new products is lowered due to rising income levels in developing countries. As many as 42 per cent global consumers have said they love trying new things, while nearly half or 49 per cent have said that though they prefer to stick with what they know, they can be inspired to experiment.
Consumers in the Asia-Pacific region have the highest propensity to switch brands, with 47 per cent saying they are willing to try new products, closely followed by 45 per cent of consumers in Africa and the Middle East and 42 per cent in Latin America. Only 36 per cent of consumers in North America and 33 per cent Europe said they were willing to switch brands. As many as 46 per cent of consumers in Thailand said they were open to trying new things and are on the lookout for new products.
“With an overwhelming majority of consumers being actively or passively open to unfaithful action, the risk for brand owners has never been greater,” said Somwalee Limrachtamorn, managing director of Nielsen Thailand.
She attributed part of this buying behaviour to the rise in e-commerce sites, which expands choices and enables price awareness. However, she said there is more to this change in consumer behaviour.
“Urbanisation in Thailand over these past years has increased significantly and will accelerate further in the next five to 10 years. Plu,s the government is launching several mega projects such as the Eastern Economic Corridor [EEC] and the Special Economic Zone Project. With this, consumers are seeking more convenience and flexibility in both shopping and shipping process, while an increased internet penetration is driving consumers’ demand for clarity and access to information. As consumers are offered more options, expectations are becoming more refined and marketers/retailers need to be agile enough to stay ahead of the curve by focusing consumers’ wants and needs,” she said.
The key factor influencing Thai consumers’ choice is value for money, with more than half or 52 per cent of Thai respondents saying that this influences their decision to try new brands or switch from their favourite brand, followed by enhanced quality or function (43 per cent). Both factors also rank the high in the Asia-Pacific region, with 40 per cent voting for value-for-money, and 42 per cent for superior quality. Apart from the two topmost factors, price, added benefits and convenience also appeared to be key influencers of brand choice (43 per cent, 43 per cent and 42 per cent respectively).
Hence, Somwalee said brands should not focus on winning or retaining loyal customers. “The drag effect of consumer demand for choice and voting with their wallets will overwhelm existing marketing and product development efforts if brands don’t more aggressively address disloyalty in the marketplace,” she said.
Overall, consumers’ willingness to try new brands is on the rise – 50 per cent of global consumers say they are likely to try new brands, compared to five years ago. In the developed markets of North America, Asia-Pacific and Western Europe one-third of consumers love new, as opportunities to be disloyal have been around for much longer due to the long-standing presence of online and physical retail stores, offering well-stocked shelves and multiple choices and price points.
On the flipside, a larger proportion of consumers (closer to half) in developing markets of Asia Pacific (50 per cent), Latin America (49 per cent) and Africa and Middle East (42 per cent), are enthralled with new products demonstrating an increase in brand-switching, given that historically retail and product assortment in these markets have been informal and limited, with only two or three product options on shelf per category. In Thailand, 41 per cent of consumers also agree that they are more likely to try new brands compare to five years ago.
A further multiplier to the equation is that more than a quarter (27 per cent) of Thai consumers are reviewing products across a broader range. This group of “conscious considerers” are important because even though they are choosing more widely than ever across brands, they tell us they prefer to stay with those they’ve tried in the past. It will take more to convince these consumers to change, but they still send signals of disloyalty.