Most current brand buyers will not buy next year

Posted by europanel on May 20, 2014

An analysis of 2,400 large (> 2% share) brands in 79 FMCG categories reveals that the average brand loses 55% of its buyers from one year to the next.

This percentage differs little by country, but is lower for larger brands, those with more SKUs and in frequently bought categories.

In addition, innovation matters:
Brands in innovative categories tend to lose more of their buyers (because innovation creates differentiation and the desire to seek variety).

At the same time, brands that innovate lose fewer buyers and gain more new buyers. Why? Because such brands are more likely:

  • to increase their SKU presence
  • to satisfy more variety-seeking needs with their existing brand
  • to keep their brand relevant for consumers

We are analysing the characteristics of brands with more/less leakage in much more detail within BG20, our research program to understand context-specific drivers of brand growth.

The fact that brands lose a large percentage of their buyers from period to period has been reported in marketing academia, for example in Byron Sharp’s seminal book How Brands Grow (2010, p. 48).