The Declining Value of Brands

This week I had the privilege of participating in the Chicago Association of Direct Marketing Educational Foundation (CADMEF) IMC Academic Roundtable.  This forum is an opportunity for academics and professionals to share research and best practices related to IMC.  Industry participants included Philip Emmanuele of Sears Holdings, Kevin Foote of Google, Ian Beacraft of Arc Worldwide and Valinda Scarbo of IBM (who shared insights from the IBM Global Chief Marketing Officer Study that I examined in a November 2011 blog post).

One of the most engaging discussions centered on the relevance of branding.  Martin Block and Don Schultz of the IMC Department at Northwestern University presented findings in association with BIGresearch that analyzed 25,000+ (adults 18+) consumers in the US.  Their research is featured in the recent publication Retailing Communities.

The primary point of our discussion?  Consumers are becoming less and less loyal to individual national brands.  The research revealed in the women’s clothing industry, 40% of the sample had no brand preference; in the sporting goods industry, 54% of the sample had no brand preference.  However, there is a growing preference for retail brands such as Amazon.

What does this paradigm shift mean for marketers?  First, we need to recognize, and accept, that as marketers we simply do not have total control over our brands.  Second, we need to understand the growing influence of digital media as consumers increasingly have greater choice and voice relative to products.  According to 6-month data since June 2011, mobile media influenced 6% of the survey sample, with 18.8% growth and social media influenced 8.6%, with 9.9% growth.  Typically, the more information consumers have, the less value brands have.

I often tell my students the 11^th commandment should be, “Thou shall not compete on price alone.” Of course, that statement is difficult to believe at times since it seems we are living in an environment where products tend to be viewed as commodities.  Still, as marketers we have opportunities to provide value – but only if we relinquish control as we know it, and start engaging customers in the relationship building process.