Study Finds 38% Of Brands Already In ‘Recession’


A recent study revealed that 38% of brands are already in ‘recession’ even as economists have not yet declared an official recession, this is according to the study conducted by Brand Keys.

“Nearly seventy percent of consumers believe a recession has already arrived,” the brand researcher found based on its analysis of consumer loyalty sentiment related to 39 brand categories, Media Post reported.

“In this instance, perception is reality,” Brand Keys Founder and President Robert Passikoff asserts, adding, “Supply chain disruptions, low inventories, and inflation all logically affect sales. Loyalty is a totally different paradigm and operates differently.”

The study also indicates U.S. brands may be heading into a “recession of brand loyalty” due to the way marketers are dealing with the economic one. It found hat 38% of the categories it analyzed have already seen consumer brand loyalty begin to recede. While 44% have seen brand loyalty grow, 18% are status quo.

Among the categories experiencing a recession in brand loyalty are ones that appear to be tied explicitly to economics and/or supply chain issues: Airlines, Appliances, Beverages (non-alcoholic), Credit Cards, Electronics, Gasoline, Hotels, Insurance, Investments, Online, OTC, Pharma, Casual Dining, Retail, Streaming Video, and Utilities.

“Consumers can’t control the economy,” Passikoff explains, adding, “But they do manage loyalty. Brand loyalty is never about price. It’s the emotional engagement that ensures future purchase. It’s the degree to which a brand meets expectations consumers hold for their category Ideal.” It’s the unequivocal answer to the question, ‘How well does the brand deliver on what you really desire?’ In this instance, how brands are meeting their expectations in the context of a recession.

“A recession – or consumers’ perceptions of a recession – became the perfect test market for brand loyalty.” said Passikoff. While a recession may force consumers to adjust their spending or even buy a substitute brand, it doesn’t affect their loyalty to a brand. Categories adapt to economic circumstances, with loyalty levels increasing or decreasing.

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