Brand Loyalty

We are through with a month of celebrations and our long and tedious wait to the next big day will come to fruition only after 2 months. The celebrations lasted a month and heralded an unprecedented shopping frenzy, through online and offline channels. Reports from reliable sources suggest that big and organized retailers stood the ground against the steamrolling online retailers but small enterprises hadn’t had a good time. The paradigm shift brought in by online retail organizations is reshaping the dynamics, thanks to bankrolling private equity investors, of an industry which has never come out of age. The changed Indian psyche now yearns for exclusivity of brands and online retail fill the wedge between traditional and organized retail.
With brands come brand loyalties. Traditionally, brand loyalty is measured on a scale of amount spent at the store. It is a structurally flawed approach to understand the preferences of a consumer, both existing as well as prospect. The strength of umbilical cord connecting brands to consumers is not just a function of spending power of a consumer but many other factors.
With respect to brand loyalty, a standalone brand may take a different course from establishments like malls and hotels. A brand wants the customer to come back to them at the drop of a hat. His/her loyalty towards the brand is measured as being directly proportional to the money spent. But, a mall or a hotel must tread a different course. If a consumer spends an equal amount at five different stores/brands in a mall, it ensures the sustainability of not just one shop, but five of them. At the end of the day, a mall wants as many stores occupied as possible. A mall can’t afford to have a brand or two being cash cows while others as laggards. A shopper spending Rs. 10,000 at a single store is always less sustainable than another shopper spending Rs. 2,000 each at five different stores.
Frequency of shopping is also a critical factor to measure loyalty. A frequent shopper brings more into the table than a bolt-from-the-blue shopper even if he/she spends as much money a frequent shopper might have spent through many transactions. A frequent shopper is financially more stable, for it’s not depended on the whims of a handful of consumers. A finance professional always bats for steady source of income than a seasonal cash flow. Agreed, the graph charting growth of the enterprise may not be exponential but it ensures that the graph doesn’t move southwards.
Loyalty is not just about money spent, but has to be understood from psychological and sociological theories and perspectives. Emotions drive human beings and a man minus emotions is a robot.

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