Australian shoppers lose brand loyalty in CPG industry shift

New research from SAP Emarsys highlights that 62% of Australian shoppers are no longer bounded by brand loyalty when it comes to consumer-packaged goods (CPG), including food brands, soft drinks, health products, and other daily goods. This shift is reshaping the CPG industry and urging brands to innovate how they engage with consumers.

The research, based on a survey of 2,000 Australian shoppers, is accompanied by a new guide from SAP Emarsys on best practices for building direct consumer engagement. It discusses the current landscape where traditional brand loyalties are being redefined by consumer preferences for flexibility and convenience in their purchasing decisions.

Despite challenges such as supply chain disruptions and market saturation, there is a silver lining for CPG brands. With the right tools, brands can more easily retain customers who might otherwise be tempted to switch due to convenience, price, or curiosity for something new. The SAP Emarsys platform empowers brands to create seamless, AI-leveraged personalised experiences across all channels, making it simpler for consumers to remain connected to their preferred brands.

According to the SAP Emarsys report, consumer products are struggling with growing supply chain disruptions, market saturation, and difficulty collecting and integrating the first-party data needed to target today's consumers. However, with consumers increasingly shopping around, loyalty programmes are becoming more important, with 31% of CPG shoppers joining a new loyalty scheme in 2024. Additionally, direct-to-consumer subscriptions are becoming a key driver for loyalty, with one in five (14%) of loyal shoppers now buying via a monthly subscription service.

To drive this type of repeat engagement, SAP Emarsys urges consumer product brands to focus on fostering emotional connections with customers, creating value exchanges, and adopting AI-leveraged omnichannel personalisation. Silvana Tagand, RVP of Revenue for APJ at SAP Emarsys, explains, "In the current economic landscape, Australians are reassessing their brand loyalties, driven not only by cost considerations but also by a desire for convenience and personalised experiences."

Krispy Kreme is highlighted as an example of effectively cultivating genuine customer loyalty through AI-driven personalisation. "Krispy Kreme, a distinguished leader in the doughnut industry, exemplifies the art of cultivating genuine customer loyalty through AI-driven personalisation. By leveraging SAP Emarsys Customer Engagement solutions, Krispy Kreme has not only retained but expanded its devoted customer base, reinforcing its position as a beloved brand," Tagand added.

Carolina Figueiredo, E-commerce and Digital Solutions Manager at Krispy Kreme, commented, "Partnering with a sophisticated customer engagement platform like SAP Emarsys has been pivotal. It's not just about maintaining loyalty; it's about deepening those connections, which has led to a 19% increase in our e-commerce orders."

As brands navigate ever-changing shifts in consumer behaviour, adopting an AI-driven omnichannel personalisation strategy powered by solutions such as SAP Emarsys is proving essential. When it becomes easier for customers to stick with those brands, both loyalty and profits increase.