The Complex Relationship Between Discoverability and CPG Brand Loyalty
Online grocers have a vested interest in ensuring that products are easily discoverable and that consumers are brand-loyal, because without product discovery there is no sale and without brand loyalty it is difficult to sustain sales on a long-term basis. Facilitating both discoverability and brand loyalty therefore is often critical to increasing online sales.
Discoverability and brand loyalty, however, can sometimes be in direct competition with each other. For example, when an online grocer promotes strong brand loyalty, it may cause the consumer to avoid looking for, discovering, and buying new products. Conversely, when discoverability is too easy it opens pathways for consumers to find products from a large number of brands, thereby complicating the consumers’ purchasing decisions and potentially weakening or destroying their loyalty to the brands that they traditionally have been using. As a result, online grocers need to be focused on the important tradeoff between these two critical elements.
A Changing Dynamic
Grocery shoppers used to buy products primarily based upon the trust they placed in their favored brands. This made shopping relatively easy because there were fewer products to select from and the purchasing decision did not require a lot of thought. Although brand loyalty is still important to many consumers, technological advancements in ecommerce and new consumer attitudes have substantially reduced its significance and have changed the way that consumers buy products. Shoppers today are more adventurous and eager to explore new brands.
This is particularly true since the onset of the COVID-19 pandemic which caused many consumers to look in new directions because of product shortages and the need to become more economical in their shopping. Indeed, according to a report by McKinsey, more than one-third of shoppers in the US have tried new brands during the past year, and almost three-quarters of them intend to continue doing so going forward. In other words, we are experiencing an era of brand erosion that is opening up opportunities for new brands, new products, and private label products.
In an effort to take advantage of these new attitudes, online grocers have begun to give them powerful new discovery tools. These include web and app-based text search (using product names, categories, and attributes), AI-powered visual search, and sort functions, as well as recommender engines based upon data-informed personalization of the shopping experience. Complemented by other omnichannel innovations (such as social media connectivity), these tools effectively place the consumers in the driver’s seat and allow them to navigate their own route to brand and product exploration. Although this new-found freedom can help consumers find products and brands that match their specific needs or tastes, it can also impinge upon brand loyalty as the consumers can jump from one brand to another with the click of a mouse. Thus, the discoverability function that is so essential to attracting a consumer to a brand in the first place can also be the brand’s nemesis in trying to retain that consumer.
Enhanced discoverability can have unanticipated consequences for online grocers as well. Although it may seem intuitive that opening doors to new brands and new products should result in increased sales, this is not always the case. In some situations giving consumers too much product information and too many brand and product choices can lead to cognitive overload and shopping fatigue. All too often this can result in cart abandonment and loss of sales. So, what can be done to mitigate these effects?
The Need to Balance Discoverability and Brand Loyalty
- One Strategy: Within-Brand Product Recommendations
Discoverability and brand loyalty are both cornerstones of the online grocery business, and the competition that can sometimes exist between them does not necessarily mean that grocers have to favor one over the other. To strike the right balance, online platforms should promote discovery of new products without foreclosing brand allegiance. This is where personalization of the shopping experience and the use of recommender engines can be helpful. One way online retailers and last mile delivery companies can foster brand loyalty and discovery of new products at the same time is by recommending new products within brands that consumers already purchase. Doing so requires having a good understanding of their consumer base, including their past purchases and the types of items included within their current search or cart.
- Using Personalized Data to Understand the Consumer
By keeping track of an individual consumer’s past purchases and search habits, online grocers can spot trends with respect to their needs and which brands they feel comfortable buying. This can also shed light on whether the consumer is buying from companies that represent particular values that are aligned with their personal values. This is important because brand values have become one of the major deciding factors in consumers’ purchasing decisions.
Armed with such information, online grocers can recommend products created by these brands regardless of whether the consumer has bought those particular products from those brands before. Doing so not only can help develop the discovery of new products, but is likely to lead to brand loyalty due to the alignment of values. Additionally, this can make the consumer more loyal to the online grocer because they may come to see from the highly personalized shopping experience that the grocer truly understands their specific needs and preferences.
- The Importance of Good Data
Product attributes, such as “vegan,” “plant-based,” “certified organic,” “sustainable,” and “locally sourced” for example not only help certain shoppers find what they want, but also can help the grocer keep better track of consumers’ needs and preferences. This, in turn, allows the retailer and last mile delivery organizations to create more personalized shopping experiences, promote brand loyalty, and enhance sales by making better use of recommender systems. However, they can only do so much if foundational product information is inaccurate, incomplete, or too simplistic. Their ability to achieve greater sales through personalization and product recommendations depends largely upon the quality of the information that it receives from the brands and that the brands receive from their suppliers. Good data is key.
Foodspace Can Assist
Better data is critical for fostering both discoverability and brand loyalty and for achieving the optimal balance between the two. Foodspace works with CPG brands to provide product information that is accurate, rich, and up-to-date to ensure improved discoverability for digital shelf success.
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