Does Brand Loyalty Decline? Investigating Brand Loyalty Evolution and the Role of Product Category Characteristics

The ultimate goal of marketers is to achieve high loyalty toward their brands. However, there is a common belief that brand loyalty declines over time. In this paper we offer insight into this area by examining the evolution of brand loyalty and the reasons that lead to this (possible) decrease. We use purchase data from the GfK panel in Denmark and analyze loyalty evolution for 55 packaged good product categories over a period of six years (2006-2011). We show that on an aggregate level, brand loyalty has not evolved. However, we observe that evolution is product category specific with some product categories showing an increase as well. We further explore the role of certain product category characteristics, such as number of brands and SKUs, private labels, and consumers’ repertoire size on influencing brand loyalty evolution.