A recent Forbes article reported “the death of brand loyalty.” Consumers are less and less likely to buy a product on brand considerations alone. Ninety of the top one hundred CPG brands are “losing market share on consistently low-growth categories.”
Blame for brand loyalty decline has fallen on a number of cultural changes that have devalued loyalty overall. Americans now view work and careers as transitional, not permanent: whereas it used to be common to spend an entire career with one employer and retire with a gold watch, now the median salaried worker spends 4.2 years in each job. Over 15.5 million people are self-employed, a number that is only expected to increase. Trends in religion (23% of Americans now identify as atheist, 6% more than decade ago) and shifts in marital behavior (an increasing number of Americans are growing up with divorced parents) reflect similar decreases in loyalty toward traditional institutions.
In an environment where simply being the familiar brand shoppers bought last time doesn’t cut it anymore, companies must work harder to reach and retain their consumers. This involves both continued innovation and, in the words of one CEO, “building an adaptive infrastructure that truly listens to what consumers want.”
Some firms are trying to do just that. Coca Cola recently rebranded Diet Coke in an attempt to appeal to La Croix consumers by adding two flavors and investing in a package redesign. Coke also reformulated the beverage with the same sugarless sweeteners used in Coke Zero Sugar to attract more health-conscious consumers who are increasingly reaching for water.
Taco Bell is working on listening to its already-large vegetarian following. The first fast food chain to earn an American Vegetarian Association certification, Taco Bell is already well known among vegetarians for options like the 7-Layer Burrito, Double Tostada, and the Cantina Power Veggie Bowl. They’re now rolling out a full vegetarian menu, which includes both existing and new vegetarian options. In doing so, the self-proclaimed “underdog” in the sector hopes to strengthen its position by adapting further to consumer demands.
While it is too early to tell exactly how effective these changes will be, Coca Cola and Taco Bell have the right idea. Even if a revamped Diet Coke or the new vegetarian menu flops, both companies are taking a huge step forward by learning to adapt to the wants of their consumer base. Static, out of touch firms eventually fade from the minds of customers and from the Fortune 500 list. The only way to stay relevant (and profitable) is to deeply understand consumers’ wants and needs—and continually innovate in order to meet them.