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ST. PETERSBURG, Fla., Sep 07, 2011—New research conducted by Catalina, the leader in precision brand building, finds that total revenues of the Top 100 brands in the nationwide Catalina Network of grocery, drug and mass merchant stores grew by just 0.7 percent during a 12-month period ending in early July. The report also demonstrates that brand defections and reduced share among previously highly loyal consumers represent a major drag on individual brand performance.
“The 2011 Mid-Year Performance Review is a strong argument for making loyalty a more significant part of brand strategy,” said Todd Morris, executive vice president, brand development, for Catalina. “Staying close and in touch with the changing needs and purchase behaviors of your brand’s most valuable consumers is the best way to retain loyal customers and grow revenue.”
The average brand in the Top 100 grew revenues 2.2 percent during the past 12 months. However, the average brand also experienced a lost opportunity equal to 8.5 percent of revenues due to defections and reduced share among shoppers who had been highly loyal buyers a year earlier. For the average brand, 46 percent of previously highly loyal consumers either completely left the brand (20 percent) or reduced their loyalty (26 percent).
The study also shows that the fastest-growing brands tended to hold onto more of their loyal consumers, while large revenue decliners tended to lose more loyal consumers. On average, the lost opportunity due to loyalty erosion equaled 11.1 percent of revenues for the five largest revenue decliners in the Top 100, versus 6 percent for the top gainers.
Brand defection often occurs suddenly, according to the study. One out of three shoppers who were 100 percent loyal to a brand in the first year of the study completely abandoned the brand for the next year after just one competitive purchase.
About the Study
The 2011 Mid-Year Performance Review is based on sales and individual consumer purchasing behavior observed across 21,000 US grocery, drug and mass merchant stores. Although this does not include all stores in the Catalina Network, the conclusions in the report are generally in line with total network results. Highly loyal consumers are defined as those who make 70 percent of all category purchases with a single brand during a 12-month period. The study looks at the impact of defections and reduced loyalty during the 12 months ending in early July of 2011 among consumers who were highly loyal to Top 100 brands during the previous 12-month period. (Link to report: http://info.catalinamarketing.com/halftime-report/ )
About Catalina Marketing
Catalina is committed to helping manufacturer and retail brands deliver unprecedented performance and healthier outcomes. With proprietary and integrated in and out-of-store marketing platforms—including CouponNetwork.com ( http://www.couponnetwork.com ), Catalina enables the delivery of the right message to the right audience in the right environment. Catalina leverages the world’s largest, transaction-level, shopper-data warehouse to develop, deliver, and measure shopper and patient-driven engagements to approximately 90M households and 130M health consumers, annually. Media distribution channels include 50,000 food, drug and mass locations worldwide, including 18,000 US pharmacies. Catalina is based in St. Petersburg, Florida, with operations in the US, Europe and Japan. To learn more, please visit http://www.catalinamarketing.com .
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