Capturing Consumer Loyalty with Meaningful Brands

In June of 2013 Havas Media published the results of its research (called Meaningful Brands) where the company explores the link between brand and the benefits plus impacts consumers believe these have on their lives. The study was conducted on 700 brands across 23 countries and surveyed 123,000 consumers in 12 key areas of interest.

One of the most shocking findings to come out of this research is that globally 73% of brands are considered irrelevant in the lives of most people and that they would not care if these brands continue to exist or not. The picture gets even worse in North America and Europe where 92% of brands are thought of as irrelevant!!

Main reasons for the decline in brand loyalty

Brand loyalty in the West has been declining over the past few decades due to the breach of trust between the public and institutions such as government and large corporations. This trust was dealt a severe blow in 2008 due to the economic meltdown of the housing market in the USA and the contagion that followed.

For Millennials’ who lived through the economic turmoil and are now entering the work force at a rate of 4 million new job seekers a year in the USA, they bring a very different set of values to their purchase decisions than the Boomers who preceded them. The Produce News article ‘How will Millennials’ impact produce sales?’ (Published April, 2014) highlights key millennial values like transparency, authenticity collaboration and being valued as individuals.

With current disposable incomes for this group at $660 billion and set to rise to $1.2 trillion by 2020, they make up 25% of the population in North America and their views are set to have a huge impact on the way companies operate.

What responses are we seeing in the fresh produce area?

With this rapidly rising spending power, three retailers in particular are taking the idea of meaningful brands very seriously. Understanding that consumers want to be associated with brands that make a difference in the world, Walmart, Whole Foods and Sprouts Farmers Market have fully embraced the idea of sustainability within their go to market strategy and see it as a differentiator and competitive advantage.

Walmart’s Lee Scott set Walmart on a different path in 2005 as he realized that the company due to its size and impact would face a credibility crisis if it did not start doing something about the concerns of the range of stakeholders it touches. Pinpointing three key sustainability goals back in 2005 not only made for good stakeholder relations, but also good business sense.

A decade later, Walmart has truly embedded sustainability thinking and principles in the business and now carries an increasing number of product lines that reflect this approach. This has been possible by the introduction of the Sustainability Index and more recently the awarding of the Sustainability leaders logo for top performing suppliers. While there are many flaws associated with the way things are done, there is no denying that Walmart is driving costs out of the supply chain with this approach and making the world a better place one step at a time.

Whole Foods has similarly embraced sustainability in a different way. With the launch of its ‘Values Matter’ campaign in October 2014, the company is clearly communicating to its customers that it cares about the way food is grown, raised and caught as it knows more and more people want assurances in the way the food system works. In the fresh produce area their ‘Responsibly Grown’ rating system measures among other things warm worker welfare, soil quality, water practices and pesticide use.

The third retailer concerned with meeting rising millennial values is Sprouts Farmer Market. Their communication and merchandising shows the company to be a force for positive social change, that Sprouts will take ownership of issues that matter and lead to find solutions and do so with transparency in an authentic manner.

Sprouts understands that millennial shoppers will gravitate to their stores when the brands they carry state where they are sourced, how these brands impact communities and the environment and what the brand selected is doing to make a difference in the world.

Why positioning your brand and company as meaningful matters for future success

Last year the Freshxperts Newsletter featured and article entitled ‘The power of a good story’ (17 March, 2014) which links well with capturing customer loyalty. It reinforces the idea that if retailers and consumers do not believe your company or brand to be relevant in their lives, they will simply not buy it?

In the produce industry with its highly concentrated distribution channels, the reality is that retailers are going to come under increasing pressure to demonstrate the value of the brands they carry. This value now extends beyond the functional attributes of the product, nice packaging, advertising support etc. Consumers and retailers want the full story of value creation or destruction for all stakeholders.

Are you and your organization ready to demonstrate this broader definition of value creation?

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Andrew Southwood

Andrew Southwood

I am drawn to the fresh produce industry because it is a vibrant, ever changing, demanding, stimulating and essential part of daily life, that is filled with amazing people who are set to rise to the challenge of feeding 10 billion people by 2050!