Year of the digital brand—new study reveals 2018’s loyalty winners and losers

by | Sep 18, 2018 | Public Relations

Loyalty has become one of retail’s most important metrics, and while it has been and remains an elusive goal for many, new research from loyalty and customer engagement research consultancy Brand Keys showcases how some brands have managed to build and maintain these strong and precious consumer bonds.

Nine of the top 10 brands in the org’s 22nd annual 2018 Loyalty Leaders list are digital brands, and 35 percent are digital tech, social networking or digital facilitator brands.

“Digital and tech brands have held their ground,” said Robert Passikoff, Brand Keys founder and president, in a news release. “But traditional brands have worked harder to create the emotional value connections necessary to bolster the loyalty bonds necessary for keeping current customers, developing new ones, and making profits.”

In 2018, non-digital brands moved up the Loyalty Leaders List an average of 11 positions, with a few making major leaps. “That’s an incredible accomplishment in today’s marketplace where consumers are hard-wired to the Internet,” said Passikoff.

2018 Top 25 Brand Keys Loyalty Leaders:

Year of the digital brand—new study reveals 2018’s loyalty leaders

Which brands are taking over the world?

To compound the challenge of creating brand loyalty, a number of brands were again represented in multiple categories. Amazon appears in three categories: Online Retail (#1), Video Streaming (#5), and Tablets (#9). Apple appears in three categories: Smartphones (#3), Tablets (#7) and Computers (#20). Google appears in two: Search Engines (#2) and Social Networking (#13, YouTube).

“It’s loyalty’s Rule of Six playing itself out in the real-world. If consumers use a brand’s products or services in one category and exhibit high degrees of loyalty,” noted Passikoff, “They are six times more likely to use the brand’s products and services in other categories. You can joke about certain brands taking over the world, but from a loyalty perspective it seems eminently conceivable.”

Category loyalty leaders: digital, social, and. . .

Digital technology, social networking, and brands that facilitate digital and social interactions, comprised the most Loyalty Leader brands again this year, representing 35 percent of the 2018 list, down 1 percent YOY, due to The Skimm’s drop from the top-100 list.

This year marks the first-time appearance of Reebok (#100) on the Loyalty Leaders List. Other categories were generally unchanged from last year with the following distribution:

  • Retail: 19 percent (+3)
  • Automotive/Auto Rental/Ride Share: 12 percent
  • Restaurants: 9 percent
  • Financial: 8 percent
  • Cosmetics: 8 percent (+1)
  • Alcohol: 7 percent
  • TV News: 2 percent

2018’s biggest loyalty winners: The Loyalty Leader Axiom

Loyalty is a predictive leading-indicator of future consumer behavior. “It’s axiomatic. The more loyal the consumer, the better consumers behave toward a brand. The better they behave, the better the brand does in the marketplace, so better is the brand’s bottom line,” added Passikoff. “Always.”

The five brands that showed the greatest loyalty leadership gains in 2018 were:

  • J. Maxx (+38 to #35, currently with net sales up 12 percent)
  • 5 Guys Burgers & Fries (+36 to #64 and same-store sales up 3 percent)
  • Zara (+32 to #57, with same-store sales +2 percent)
  • Lyft (+18 to #77, now with 35 percent of the U.S. rideshare market)
  • JPMorgan Chase (+17 to #51 accompanied by an 18 percent increase in profits)

2018’s biggest loyalty losers: Loyalty’s inverse

The five brands with the greatest loyalty erosion included:

  • Airbnb (-68 to #99, suffering from regulatory and local-resident protests)
  • Starbucks (-46 to #63, that announced the closing of 150 stores)
  • MAC Cosmetics (-42 to #81, caught up this year in an animal testing controversy)
  • Victoria’s Secret (-33 to #93, with -6 percent same store sales)
  • BuzzFeed (-21 to #86, with web traffic down and readers heading back to traditional news sites.

Loyalty’s real bottom line

When it comes to loyalty—no matter the category—brands that understand that emotional connections can serve as surrogates for added-value will succeed. “Brands that have made loyalty and emotional engagement a strategic priority,” said Passikoff, “always appear high on the Loyalty Leaders List. More importantly, they always appear at the top of consumers’ shopping lists.”

The Brand Keys Loyalty and Engagement Model and rankings are 100 percent consumer driven, and are proven predictive, leading indicators of brand and corporate profitability. “The good news is that brand loyalty is understandable. The better news is, it can be quantified and predicted,” said Passikoff. “Those are the kind of metrics you want working for your brand.”

See the complete Top 100 brands list here.

Brand Keys Loyalty Leaders analysis was conducted in September 2018 and includes assessments from 50,527 consumers, 16 to 65 years of age, recruited from the nine US Census Regions. Respondents self-selected the categories in which they are consumers and assessed the brands for which they are customers. For the 2018 Loyalty Leader assessments, consumers assessed 84 categories and 761 brands.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter