In order to stay relevant in an ever-changing market, traditional brands may need to become more like digital brands to keep up. A recent article in the Harvard Business Review provides evidence on consumer’s habits, attitudes towards brands and proves consumers are increasing their loyalty towards digital brands.
A joint study conducted by SAP, Siegel+Gale and Shift Thinking surveyed over 5,000 U.S. consumers. The study asked the consumers questions about their perception, usage, advocacy and preferences for 50 traditional and digital brands. Not surprisingly, the digital brands were found to make consumers lives easier, proving that consumers will continue to use these brands because of the value they add to their lives.
Many consumers may not be able to distinguish between traditional and digital brands; however, the approaches each brand takes to attract consumer’s attention are quite different. Digital brands are seen more often as usage brands which means they emphasise the experience of the consumer. Additionally, usage brands rely more heavily on exposure through social media and word of mouth. Conversely, traditional brands are seen more often as purchase brands meaning they emphasize the steps leading up to the consumer’s purchase and focus on communication to the consumer.
Due to the differing approaches of the two types of brands, the switch from traditional to digital can be challenging. The close relationship between the brand and the consumer’s experience for digital brands creates a need for marketing and product development to be closely intertwined. Although the switch to digital may be significant, it can yield positive benefits for a brand. The study showed that consumers were willing to pay up to 7% more for the digital brands and were 8% less likely to switch to a different brand.
It is important for brands to adapt to fit consumer’s behaviour and preferences. By switching from a traditional approach to a digital approach, brands are able to stay relevant to consumers and see their bottom line benefit.