Are older shoppers more loyal than younger ones?

Following a post by Ethan Decker on 'WHY AREN’T OLD PEOPLE IN YOUR ADS?' there were some comments/questions around 'Are older shoppers more loyal than younger ones?' Whilst this has been answered before I wanted to investigate again and provide you with a short evidence-based article.

Before we get going, there is a wider question on whether there is any brand loyalty at all. We see in the data that almost all shoppers have a repertoire of brands within categories. Whilst brands sometimes have a very small minority of brand buyers who are 100% loyal, these shoppers tend to buy the category infrequently.

There is also another question on how best to measure loyalty. Is it someone who only buys the same brand within a category every time? Is it someone who buys a brand year after year? For the purposes of this article, I have looked at the share of requirements (or share of wallet) within a 52-week window. This takes brand buyers and gives a percentage figure for how much of their category spend goes on that brand. The reason for choosing this measure is so we can compare loyalty across demographics.

The following data is only looking at the FMCG industry and is specific to the UK market.

I have taken 10 of the biggest brands in the market across 10 different FMCG categories (predominantly food and drinks brands). Each brand was in the Top 20 of our most chosen brands list from Brand Footprint and has a penetration of well over 50% of GB households.

The first finding (even before we look at differences by demographics) is that the level of loyalty differs significantly across categories. Remember these brands are all #1 within their respective categories.

Whilst this is broadly in line with the market share they command in their category, it's worth reminding there are two factors that drive such differences. The first is category frequency. The more often a category is purchased the more chances a shopper has to buy another brand, and vice-versa. We see an inverse correlation between loyalty and frequency of -0.64. The other factor is the number of brand choices available. Take for example the brand with the lowest level of 'loyalty' below. Alongside being in a category with a high level of purchase frequency there are also 50 brands with at least 1% market share.

So back to the main question of this article, how does this differ by age and are older shoppers more loyal than younger ones?

Taking the same metric for the same set of brands, we see that the level of loyalty irrelevant of lifestage follows the same pattern. i.e. Brand 1 has the highest loyalty across lifestages and Brand 10 the lowest.

We also see that Retired households (i.e. the oldest shoppers in this analysis) had slightly higher loyalty across these brands with an average loyalty of 44%, compared to 41% for Pre-Family Households, 40% for Family Households and 41% for Post-Family Households.

This difference is marginal.

If we next look brand-by-brand we see that the slightly higher loyalty for the eldest shoppers is far from consistent. Whilst these shoppers had the highest loyalty for six of the brands they also had the lowest loyalty for two of them.

Whatsmore for the brands that play in the categories with the highest purchase frequency (Brand 8, Brand 9, and Brand 10) the level of loyalty between the youngest and oldest, all but disappears. The importance of purchase frequency on loyalty is key, which we will go on to explore further.

Looking at the chart above you may ask why Retired households have what appears much higher loyalty for particular brands, for example, Brand 2. This nuance is driven by category purchase frequency. But rather than the difference across categories, it's the difference across lifestages. For this specific brand, Retired households purchase the category 26% less often than the average shopper, hence the uplift in loyalty for the brand.

When we control for how often shoppers buy the category we see the level of loyalty follows the same path irrelevant of lifestage. Loyalty slowly diminishes the more often a shopper purchases the category.

Diminishing loyalty being driven by frequency isn't specific to this brand, it is consistent across every brand, we just chose this one as from the ten as it had the biggest discrepancy in loyalty between old and young shoppers.

In summary, there is very little evidence that older shoppers are more brand loyal (in the world of FMCG) and when it appears they are, this is often driven by their underlying purchasing behaviour of the category.