Study: Gens X, Y Rely On Research, Less On Loyalty

Here's some advice to brands putting the onus on loyalty to drive sales: "Be afraid...be very afraid." AMP Agency, a Boston-based branding firm, has just completed a study of consumers, "Inside the Buy," that suggests that actually very few consumers between the ages of 25 and 49 are moved to purchase by habit, or sentimental considerations for a brand.

The study, based on a Fall 2010 poll of 865 Gen X and Y consumers, looks at what happens in the "consideration phase" of the purchase path, where the Web and what AMP found to be a "new/modern path" to purchase hold sway. The quantitative and qualitative study also addressed a changing view of brand loyalty. The firm found that just 3% of consumers say they are loyal to a particular brand and never buy anything else.

The study, which looks at five product categories -- baby products, consumer electronics, food and beverage, health and beauty, and fashion -- finds that the very idea of loyalty has changed for 97% of consumers. "New consumer behavior is redefining what we view as 'contemporary loyalty'," said Allison Marsh, VP, Consumer Insights at AMP Agency. "With more information, consumers have seized control and are more open to the wide choices in the marketplace."

Forty-three percent of respondents polled by the study said they do some type of research before they buy. By product category, 64% of people AMP surveyed said they do research before buying electronics; 44% said they do research when buying baby products; 31% do so for health and beauty; and about a quarter said they do "some type of research" before making a decision in both the fashion and food and beverage categories.

According to the "Inside the Buy" study, men spend more time doing pre-purchase research in areas pertaining to personal style and appearance. Forty-six percent of male respondents said they always research fashion purchases, while only 32% of females said as much. For the health and beauty category, 37% of male respondents said they always research products, while a quarter of female respondents said they did so.

Ninety-four percent of consumers said online research positively influenced their decision to make a purchase, and nearly four in ten said they bought a product because of the research they found. Paradoxically, given the fire hose of content the Web disgorges, 30% of those polled said they cannot find enough of the information they are looking for online, and only 4% said they were overwhelmed by the amount of research available to them in a particular category.

About half of consumers go to a brand's Web site for pre-purchase research, while 46% said they go to a retailer's Web site initially. Forty percent said they visit third-party review sites, and 38% said they go to social media Web sites. Almost three-quarters of respondents said their first choice is general consumer reviews, which is about twice the importance they put on expert reviews on product durability and functionality. In fact, half of respondents said online consumer reviews most influenced their purchase. Forty-one percent said feedback from a friend was important, and 37% were influenced by the number of positive reviews they read online.

"By identifying the steps involved in the consideration process, we found that consumers are being strongly influenced by information and opinions shared online," said Marsh.

(Source: Marketing Daily, 02/07/11)