Consumer Brand Loyalty on the Decline, Convenience Store Offerings Influence Gas Purchase Decisions
Generational differences have contributed to a steady decline in consumer brand loyalty when purchasing gasoline, according to The NPD Group, a leading market research company. According to NPD's Motor Fuels Index, which tracks consumer motor fuel purchasing behaviors, older consumers, those over 65, have always been more likely to limit brand choice to only one brand, while younger consumers historically have been more willing to shop around.
NPD finds that the percentage reporting they "always buy one brand of gasoline" measured 28% in the first quarter of 2009, compared to 34% in the first quarter of 2000. When comparing first quarter 2009 loyalty measures versus first quarter 2000, the age group that experienced the greatest decline was the 30-to-44 age segment. In 2000, 18- to 29-year-olds were the least brand loyal; in the intervening nine years, many of them brought their brand switching behavior into the 30-to-44 age bracket. Compared to overall brand loyalty, the 30-to-44 age group is now the most likely group to try multiple brands among those who have purchased a major brand, according to NPD's Motor Fuels Index.
"I believe we can expect the trend to continue as drivers, ages 18 to 29, also exhibit less loyalty than previous generations," says David Portalatin, industry analyst for NPD's automotive unit. "This group is beginning to be influenced by the ‘echo boom,' children of Baby Boomers, who will be the largest generation of drivers in the history of the automobile."
NPD analyzed the most loyal consumers (those over 65 who only use one brand) and finds their brand choice drivers are more likely to be related to the credit card offering. And, while quality and performance always will be important to the gasoline purchase decision, younger consumers who report loyalty to a single fuel brand also report their brand choice is more likely to be driven by the convenience store offering where they buy gas.
“It’s going to take best-in-class retailing, including fresh food offerings and a diversity of products and services to attract and retain drivers’ fuel purchases in the future,” says Portalatin. “Gasoline marketers will want to leverage today’s technology to implement loyalty promotions at the pump, such as discounts, rebates, and the rewards tied to in-store purchasing.”
"Motor Fuels Index," conducted by The NPD Group, September 21, 2009. Website: www.npd.com.