ST. PETERSBURG, Fla. -- Recent data generated by Catalina Marketing here suggests that brand switching among consumers is less prevalent than commonly thought.
The findings of Checkout Direct -- a time-based household marketing program that traces consumer behavior through the retailers' check-cashing and other card-based programs -- indicate that consumer brand loyalty averaged 65% and ran as high as 72%. Based on the actual purchases of 200,000 households over a period of six months, the study traced the sales of 34 brands in eight different categories.
More specifically, 72% of consumers remained loyal to brands of premium juice, 72% to premium laundry detergent, 67% to feminine hygiene products, 66% to pet food and 66% to all-purpose cleaners. Running somewhat below average were diet soft drinks with 63%, pasta sauce at 58% and ready-to-serve canned soup at 55%.
The results reflect the study's ability to measure household behavior accurately, said George Mercer, vice president of new product development at Catalina Marketing.
"This is the kind of information that market share and other traditional analyses missed," Mercer said. "Those measures just couldn't break purchases down on a household-by-household level."
Moreover, some of the data suggests that brand loyalty is also a bipolar proposition. In pet food, for example, 85.3% of shoppers either always or never bought a specific brand.
"This certainly runs counter to conventional thinking," Mercer admitted, "but it only makes all the more case for marketing programs where past purchasing habits and loyalties can be effectively targeted."
As such a program, Catalina Marketing Network responds to such data by providing each household with pre-purchase coupons that reflect the previous behavior recorded through the Checkout Direct program.
While the consumer loyalty figures cited above reflect consumer behavior before the widespread distribution of coupons, Mercer said, coupon circulation increased sales volumes by an average of 12% to 25%.
"Once we started distributing the coupons," Mercer said, "we saw very strong sales volume gains that ranged as high as 50%."
The provision of these high-value promotional incentives enables brand marketers to simultaneously target loyal competitor households while protecting their own loyal households from competitive incursions, the company said in a press release.
In addition to targeting these heavy category users, the program allows marketers to tailor coupon distribution to each household's temporal purchasing patterns.
"Not only do we understand what you're going to buy," Mercer said, "but we can anticipate when you're going to purchase it."
After a 12-month test, Catalina introduced Checkout Direct last October in the New York, Philadelphia, Chicago and southern California areas. Participating retailers include Pathmark, ShopRite, Dominick's, Ralphs, Lucky and Alpha Beta.
The program currently reaches five million households and will reach an estimated 10 million by year-end.