Global brands gain in Australia

Warc, 13 February 2013

SYDNEY: Australian consumers are increasingly switching their allegiance away from home-grown brands to international ones, according to a new report.

This development is especially marked in the higher income segment and younger age groups, says the '2013 Consumer Loyalty Study' from Epsilon, the marketing services firm.

The company interviewed 408 people during the third quarter of 2012 as it examined attitudes to companies in the clothing, grocery, financial services and travel sectors.

Part of the reason for this trend is the strength of the Australian dollar which has enhanced consumers' buying power when it comes to overseas-produced goods, as well as the recent expansion into Australia of international retail brands such as Zara and Top Shop.

About one-third of respondents reported being extremely or very loyal to the companies they use most often, with the highest loyalty levels felt towards grocery and financial services brands, both recording a figure of 44%.

At the same time, another 30% said they were prepared to ditch their favourite brands if they had any negative experiences such as incorrect billing or difficult refund policies.

"The definition of consumer loyalty is constantly changing, especially in such a dynamic market," said Michael Kustreba, vice president of client services, Asia Pacific, Epsilon.

"Brands must attune to consumer feedback in order to be successful in the Australian retail market," he added.

The lowest levels of loyalty were recorded in the clothing and travel sectors, at 27% and 28% respectively, perhaps because these two are fragmented, with a wide range of brands to choose from.

That said, loyalty levels in the clothing sector increased sharply in 2012, rising from 16%, a trend likely to continue as the retail clothing sector undergoes a period of profound change.

Data sourced from Marketing/Epsilon; additional content by Warc staff