Research Watch: Colloquy Gauges Global Outlook for Brand Loyalty

A new study from loyalty marketing company LoyaltyOne's Colloquy arm, sponsored by Epsilon, sheds light on current consumer attitudes toward brand loyalty in the context of current global economic challenges. The study looks at consumer attitudes in two sectors: emerging economies (Brazil, China and India) and developed economies (Australia, Canada and the U.S.). 

The study reveals how consumers in emerging markets respond differently to new brands and product opportunities than do their counterparts in developed nations. In emerging economies, 35 percent of shoppers welcome foreign brands, while only about 7 percent of consumers in developed countries felt that foreign competition was positive. In fact, 90 percent of Chinese consumers trust foreign brands over their own brands.

Consumers in Brazil and India were happier with their own domestic brands than the Chinese, but not nearly as much as consumers in developed economies. In Australia, Canada and the U.S., consumers are over twice as likely to trust their own brands versus ones from other countries.

Obviously, this presents an opportunity for well-established brands from developed nations to make significant inroads with consumers in emerging countries. This could explain why so many American brands, for example, have pursued an expansion strategy in such countries as Brazil, China and India, even as the same brands pull back and regroup in other sectors.

Brand loyalty also seems to be stronger with consumers in emerging countries. An average of 29 percent of consumers in Brazil, China and India say it pays to be loyal to favored brands, while only 11 percent of those in Australia, Canada and the U.S. agree. Consumers in emerging countries are twice as likely as those in developed countries to say that a rewards program influences what companies they do business with.

Interestingly, there is a marked difference in the way consumers perceive economic prospects for themselves and their families in the next ten years. Consumers in emerging countries expressed optimism at levels two to four times higher than those in more developed markets. Brazilians are the most confident about their economic future — 71 percent vs. 47 percent in China and 34 percent in India. Economic optimism in developed countries, however, was just 12 percent in Australia, 19 percent in Canada, and 17 percent in the U.S.

The survey insights caused Colloquy to classify consumers in developed countries as "Tired, Turned Off, and Tuned Out," because in these markets, "there is strong evidence of a new set of much higher expectations for innovation and reinvention among loyalty programs." The emerging economies, however, are characterized as "Energy, Engagement, and Enthusiasm" because of their "prevailing commonality in optimism."