A New Consumer Mindset Unfolds in Developed and Emerging Markets

COLLOQUY's 2011 Cross-Cultural Loyalty Study Uncovers Global Perceptions on Loyalty and Implications for Spending

TORONTO, Nov. 2, 2011 /CNW/ - Ninety per cent of Chinese consumers trust foreign brands over domestic, and shoppers in Brazil, India and China say they are significantly more likely than Americans and Canadians to use a credit card for something they can't afford. The results of a one-of-a kind global study on shopping behaviour and consumer loyalty also found Brazilians are far more concerned than Americans and Canadians about protecting personal information, while Chinese consumers are far less concerned than their North American counterparts.

These insights are among many contained the "2011 COLLOQUY Cross-Cultural Loyalty Study," which spans six global economies. Sponsored by Epsilon and LoyaltyOne, this study provides a timely and comprehensive window into current consumer attitudes toward loyalty amidst continued global economic turmoil. COLLOQUY, a LoyaltyOne company, is a leading provider of loyalty marketing publishing, research and education.  Epsilon is a global marketing and analytics leader focused on helping brands deepen their relationships with customers.

Signs of significant growth potential for North American businesses aiming to enter rapidly developing economies were found along with the critical importance of businesses "localizing" their consumer marketing approaches in these markets. The study revealed stark contrasts in optimism between three developed nations—the U.S., Canada and Australia—and three emerging markets—India, China and Brazil. These contrasts underpin fundamental differences in sentiment in developed and emerging markets during a time when corporations are focused on strategies for stability and growth. The message is clear: even in markets with pent-up demand, consumers in emerging markets respond differently to new brands and product opportunities than do their counterparts in developed nations.

The full research findings will be released by COLLOQUY in a three-part white paper series. The first, entitled "The Global Loyalty Compass," is now available free of charge at http://www.colloquy.com/crosscultural. It provides a worldwide overview, pointing to leading economic indicators and important behavioural nuances by market.

The effectiveness and relevance of brand communications and marketing is analyzed across distinct consumer segments. The U.S., Canada and Australia data spans the general population and includes additional analysis in the affluent, young adult and senior sectors of the United States and in Canada. The emerging market data (India, China and Brazil) includes attitudes and perceptions from consumers across three different socioeconomic classes.

Three T's—Tired, Turned Off, and Tuned Out—are used to characterize consumers in developed markets, where there is strong evidence of a new set of much higher expectations for innovation and reinvention among loyalty programs.

Conversely, the emerging market consumer sentiments can be summed up as Three E's—Energy, Engagement, and Enthusiasm. Yet, despite this prevailing commonality in optimism, marked differences in perceptions around loyalty and shopping-related behaviours were detected.

According to LoyaltyOne President Bryan Pearson, whose book, The Loyalty Leap: Turning Customer Information into Customer Intimacy, is due out in May 2012: "Consumer sentiment is incredibly important bellwether. While there are many imminent concerns for business on the horizon, corporations, especially those that are banking on loyalty for growth, would be wise to heed two strong prevailing themes: Success in North America requires a rewrite of the rules of engagement, and emerging markets will not be won with a one-size-fits-all mentality."

Developed and Emerging Market Comparison Highlights:

  • Foreign vs. domestic brands: Shoppers in emerging nations are more welcoming of foreign brands and in some cases are more trusting of foreign/global brands. In China, nine out of 10 consumers say that global brands are more trustworthy than domestic brands. Chinese consumers are six times more likely than Americans to agree with the statement that competition from foreign companies is a good thing.
  • Credit card usage: China, Brazil and India consumers are five times more likely than U.S. and Canadian consumers to say they will use credit cards for "things you can't afford now."
  • Privacy: 68% of Brazilian consumers are concerned about protecting their personal information, compared with 50% of consumers in the United States and Canada. This far outstrips China, where just 33% of respondents said they are concerned.
  • Brand Loyalty Defined: Consumers almost universally define brand loyalty as telling friends or family to shop at a particular store, except in China, where loyalty is defined as shopping with a specific company for more than three years.

"We've entered into a period of great change and complexity, which is driving a critical need for clarity and direction. This study is an essential navigational beacon regardless of whether you're leading the charge for growth on foreign soil or in a market where growth is increasingly hard to mine," says Kelly Hlavinka, Managing Partner of COLLOQUY.

In addition to the macro comparisons between mature and emerging economies, the "2011 COLLOQUY Cross-Cultural Loyalty Study" explores in-depth sentiments of each of the cohorts across the markets studied. A fulsome analysis of the developed markets will be the subject of the second of the three white papers, due out later in November. It will provide a closer look at the effects of the confidence crisis in the mature markets.

In this installment, marketers in North America will discover several sobering challenges:

  • Only 12% of Americans and 10% of Canadians strongly agree that it pays to be loyal to your favorite brands.
  • Data compared with earlier studies will show that engagement with marketing communications is trending down in several channels including social media.

"There are some incredibly compelling and eye-opening findings in our research including what's on the horizon for customer loyalty strategies," adds Hlavinka. "I think chief marketing officers are going to be surprised with the trends and needs that are reshaping customer expectations and loyalty globally. There is vast loyalty opportunity to evolve how we engage customers in the developed markets. We've also uncovered a strong desire for special services & privileges in the emerging markets. Marketers would be well served to understand these trends and deploy strategies to capitalize on them."

The third white paper, slated for release in February 2012, will paint some stark on-the-ground differences among the same cohorts across the three emerging markets, underscoring disparities in cultural and behavioural characteristics, despite a shared optimism.

According to Hlavinka, "The findings from the emerging markets are telling us that even where there is pent-up demand, setting up shop doesn't guarantee you'll end up in the winner's circle. If, on the other hand, you parlay core insights into a long-term engagement strategy from the outset, the potential for ongoing return on investment increases exponentially."

About LoyaltyOne

LoyaltyOne is a global provider of loyalty strategy and programs, customer analytics and relationship marketing services. Its roster of clients includes leading businesses and brands in multiple sectors such as retail, banking, manufacturing, government, natural resources and utilities. LoyaltyOne businesses include Canada's AIR MILES Reward Program - North America's premiere coalition loyalty program, COLLOQUY, Precima, LoyaltyOne Consulting and Direct Antidote. LoyaltyOne's industry-leading Associates, practical experience and proven capabilities set the benchmark of thought leadership in the loyalty marketplace. Toronto-based LoyaltyOne is an Alliance Data company. For more than 30 years, Alliance Data has helped its clients build more profitable, more loyal relationships with their customers. For more information, visit www.loyalty.com.


COLLOQUY comprises a collection of publishing, education and research resources devoted to the global loyalty-marketing industry. Owned by LoyaltyOne, COLLOQUY has served the loyalty-marketing industry since 1990 with over 40,000 global subscribers to its magazine and www.colloquy.com the most comprehensive loyalty web site in the world.  COLLOQUY's research division develops research studies and white papers including industry-specific reports, sizing studies and insights into the drivers of consumer behaviour. COLLOQUY also provides educational services through workshops, webinars and speeches at events throughout the world and is a loyalty-marketing partner of both the Direct Marketing Association and the Canadian Marketing Association and a content provider to the American Marketing Association. COLLOQUY also operates the COLLOQUY Network, a global consortium of practitioners certified in COLLOQUY's proprietary methodology.  COLLOQUY magazine subscriptions are available at no cost to qualified persons at www.colloquy.com or by calling 513.248.9184.

About Epsilon

Epsilon is the industry's leading marketing services firm, with a broad array of data-driven, multi-channel marketing solutions that leverage consumer insight to help brands deepen their relationships with customers. Services include strategic consulting, acquisition and customer database technologies, loyalty management, proprietary data, predictive modeling and a full range of direct and digital agency services, including creative, interactive web design, email deployment, search engine optimization and direct mail production. In addition, Epsilon is the world's largest permission-based email marketer. Epsilon is an Alliance Data company. For more information, visit www.epsilon.com or call 1-800-309-0505.

SOURCE LoyaltyOne

For further information:

Sebastian Gatica or Amy Greenshields, Environics

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