Brand, Campaigns & Content April 22, 2021
Creating brand preference in a crowded e-commerce market
The e-commerce industry has largely been in survival mode for the last year. Despite the exponential growth stats that continue to be shared, the reality for many has been a rushed process to either get online or optimise digital services in order to compete for the attention of consumers. In such a saturated and increasingly altruistic market, creating brand preference is an opportune approach to ensuring business longevity as we edge closer to the, hopeful, end of the pandemic.
The internet has made it easy for customers to browse millions of products, but it’s not as easy to find the right product. Previously, the seller offering the highest quality product for the most affordable cost would most likely have secured the purchase, but with products and prices duplicated from site to site, the winning companies are now those that excel in service. But longer term, brand preference is what will keep those customers coming back, and spending more.
THE VALUE OF BRAND
Brand is one of the most valuable assets an e-commerce company has, but unlike other more tangible assets, it is often lesser recognised as it’s hard to quantify its true value. Despite the lack of availability of everyday tools and metrics to help marketing teams demonstrate their full brand impact and influence, academic research has proven how superior brand preference positively impacts the bottom line.
A study by the Marketing Accountability Standards Board showed a direct correlation between brand preference and market share across 120 brands in 12 categories, and a study by the Marketing Science Institute found that superior brand preference commanded an average of 26% higher price premiums, even when brand equity is the same.
This logic is obvious when you think of the super-brands that are often put on a pedestal when branding is discussed, like Apple, Nike and Tesla. What these brands have in common is that they’re all experts and communicating their why:
“Bring inspiration and innovation to every athlete in the world” – Nike
“Bring the best user experience to its customers through innovative hardware” – Apple
“Accelerate the world’s transition to sustainable energy” – Tesla
These brand ‘whys’ consistently filter into everything the respective companies do, creating deeper consumer connections and allowing them to secure a place of preference in the hearts and minds of their customers. While these examples prove the point that brand preference has a positive financial impact, with all three consistently featuring in most valuable global brand lists, it isn’t as clear cut for the other 99% of companies that don’t have the same super-brand budgets and resources.
GAIN PREFERENCE WITH PURPOSE
While not all companies will (or want) to be the next Nike, Apple or Tesla of the world, any e-commerce brand with long term goals should be following suit by defining its purpose. Strong brand purpose creates a more emotional, human connection between company and consumer; a key driver of brand preference.
The COVID-19 pandemic has taken an economic and emotional toll, making potential customers much more cognisant of brand reactions to the crisis to help guide them in being more mindful of how and where they spend their money in future. In a recent study, Deloitte found that when companies’ crisis responses are driven by a holistic purpose, they garner more attention and consumer interest; with 79% of global consumers taking note of instances when brands reacted positively to help their customers, workforce or community in response to the pandemic. In addition, half of consumers have said they would boycott brands that do not align to their core values and beliefs.
Today’s consumers want to gain more than just a product when they make a purchase, so brands need to ensure that what they offer is mutually profitable, most likely in financial terms for the brand and in a moral sense for the consumer. Take BrewDog as an example; the brand recently announced it will plant one million trees as part of its plan to remove twice as much carbon from the air than it emits each year, helping its loyal customers morally gain from supporting a company that is doing good for the world.
Being a purpose-driven company is not without challenges even in a non-pandemic environment, but those that prioritise purpose, have a strong brand strategy and identity, and that know and communicate why they exist regardless of what they sell, are likely to be better positioned to navigate the pandemic, other future crises or major societal changes.
IMPORTANCE OF TRUST
The global pandemic, resulting economic crisis and ongoing outcry over racial injustice has put consumer trust to the test throughout the last year. The 2021 Edelman Trust Barometer found that trust fell by almost four points on average across the world’s largest economies, China, the US, Germany and the UK. Despite this, of the four institutions analysed (business, government, NGOs and media), business was the only one to secure an overall position of trust; although its ranking of 61% was only two points above the neutral category. Locally, trust in companies headquartered in the UK fell by five points to 56%, its lowest position in eight years of tracking.
Trust is a consistent characteristic of preferred brands. Consumers want to be able to trust the companies they purchase from, trust that they can find items at the cheapest price, trust that they will be delivered promptly, and trust that if there is an issue it will be fixed; so UK business has some way to go to provide customers with the certainty they crave.
The first step to building trust is listening to customers to make sure your company addresses both their immediate and long-term needs, and leveraging these insights to inspire action. Creating more personal, human connections with consumers is a catalyst of brand preference, which in the longer term will help companies influence shoppers’ decisions.
Standing for something more than the products you sell is the key to gaining brand preference in a crowded online market. The team at Dept can help you achieve this in multiple ways, from analysing exactly what your customers want and providing them with a premium user experience to strengthening your brand. Get in touch with our experts to find out more.