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With tough times likely post Covid-19, we look at the importance of innovation and how volume share increases translate into added value over time.
Finally, despite lower overall shopping frequency in 2020, category frequency increased and brand loyalty dropped.
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The role of innovation is especially critical at times of hardship
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The next few years are likely to be very hard for many families worldwide. In these times, it is tempting to curtail marketing investment and reduce new product activity.
Many studies have shown that this leads to long term ‘hurt’ and that brand growth is even more driven by effective activity.
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Source: BG20 8 W Europe Countries 2008-11
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If a brand gains volume share, the chances are that the increase is sustained. it also translates into improved value returns over time
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Of the brands that gain volume share in year one, 84% also increased value share.
Five years later, 63% were still up in volume share vs year zero and nearly all of them were then also up in value share.
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Source: BG20 for 8 countries and 2700 brands. Two periods of analysis 2008-2013 and 2013-2018
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In 2020 category shopping frequency increased and brand loyalty dropped
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Although the pandemic led to lower overall shopping frequency, the record levels of market growth meant that each category featured more often in each basket and so, with more opportunities to switch, brand loyalty dropped.
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Source: BG20 3587 TOP 10 category brands in Germany, Ireland, Spain and UK
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What is BG20?
BG20 is a global project, looking at the drivers of long-term brand growth. If you would like to learn more about this topic please contact understand@europanel.com
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