Recession Kills Brand Loyalty – Retailers Turn To Social Media!

Generic vs. Brand

"Generic" vs. "Brand"

For many individuals, money is tight these days and as the economy keeps slipping, so will brand name loyalty.

Following up on the recent topic of “Brand” vs. “Generic” during an economic downturn (Article: Financial Bailout leaves Tech & Media Behind…), I felt compelled to continue covering this direction after reading a very compelling report by eMarketer.com. In their article, Social Media and Shopping Behavior , they touch on the topic of consumers using social-media as a source for making product purchasing decisions. Quoting eMarketer, “To stay relevant, retailers must determine how to incorporate social media, such as social networks and blogs, into their marketing strategies.” Considering the cost-effectiveness of social media marketing, smaller and more generic brands have the chance to swoop in and compete with the “Big Brands” in targeting the consumers.

There are a lot of free marketing technology options for retailers, and in the online space, their target audience is continuously growing. “Generation Y (those born after 1979) online buyers are more immersed in online and mobile activities than any other generation, according to 2008 research from shopping comparison site PriceGrabber. Some 85% of Gen Y respondents said they participated in social networking, and 57% reported involvement with blogs.” (eMarketer) And Generation Y also represents the consumers with constantly updated retailer and product ratings.

A 2008 study conducted by the Society for New Communications Research found “nearly three-quarters of respondents choose retailers and products based on others’ customer care experiences shared online.” (eMarketer)

Search engines like twing.com, are going to make a profit off during this “economic downturn” as well. They developed a custom search engine dedicated to forums and online communities. Powered by their proprietary technology, Buzz Graph, they help brand managers gain insight into product and company discussions helping improve both targeting and product quality. Their sight was doing well back in July and I’m predicting they will see a boost in the near-future as Brand Advertisers start pumping more dollars into targeting their customers. Also, PriceGrabber will see more business as consumers will consult customer reviews to help in their decision buying process.

keep a close eye on how much Retailers are going to spend on “Brand Loyalty” this quarter, and how much of that is online!

Be Sociable, Share!

Posted under Online Marketing

This post was written by Joshua Russak on October 2, 2008

Tags: , , , ,

2 Comments so far

  1. Rachel October 2, 2008 10:34 pm

    Mr. Russak,
    You have taken an unfortunate current issue and made it clear for anyone to understand. Thanks for the clarification on this subject for my paper.
    Sincerely.

  2. online stock trading guru January 10, 2010 6:58 pm

    Super-Duper site! I am loving it!! Will come back again – taking your feeds too now, Thanks.

    I’m Out! :)

Leave a Comment

Name (required)

Email (required)

Website

Comments

More Blog Post