Brand Loyalty Takes a Hit
There are no atheists in foxholes, goes the old saying—and, these days, there aren’t too many brand loyalists there either.
This realization was underscored by an article in Sunday’s New York Times, noting that a Lucky Charms-consuming family is now enjoying something called Millville Marshmallows & Stars for breakfast, while another has substituted Briargate steak sauce for A1.
In an era of $4 a gallon milk, in other words, brand loyalty goes out the window.
(For most people, anyway. I still stand in awe of those among us who continue to frequent Exxon for gasoline, not just because the conglomerate seems to consistently sock consumers with the highest prices around, but also because they never satisfactorily dealt with that whole Exxon Valdez situation.)
Not that Exxon or General Mills or Kraft are going away anytime soon, but they’re definitely starting to feel the pinch. (Well, maybe not Exxon, with its net income of $40.6 billion—a new record!—in 2007. Part of the company’s branding campaign is its motto: “Taking on the world’s toughest energy challenges.” Not just taking them on, but wrestling them to the ground and making unkind remarks about their mother, I’d say.)
But while the executives at Exxon continued laughing up their sleeves, consumer confidence fell for a third straight month in April, hitting its weakest point in more than a quarter century, according to the Reuters/University of Michigan Surveys of Consumers.
High fuel and food prices, shrinking income gains, falling home values, and general unease have “had a devastating impact on buying plans, with consumers citing these uncertainties three times as frequently as they did a year ago,” the report said.
And if a rising economic tide floats all boats, what happens when low tide hits?
We’ve all seen the near-panic state that Starbucks seems to be heading into, desperately trying to reinvent itself in a number of ways to make sure those frappucinos keep selling. Most high-price retail sectors are also beginning to hurt, as consumers increasingly swing towards Target and T.J. Maxx and away from Neiman Marcus and Nordstrom.
And that’s where branding seems to be headed: in Wal-Mart we trust. If Saks Fifth Avenue is still around when we dig out of the rubble, terrific; if not, well, you had a good run. Brand names—at least, the higher-priced ones—aren’t going to matter as much … and the laughter in the boardrooms behind those brands may yet sound like the voice of increasingly despairing consumers: the whimper of whipped dogs.
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