Issue #70: How Are Brand Affinities Developed?

How Are Brand Affinities Developed?

Lately, I have frequently been thinking about why people choose a certain brand and how that brand relationship strengthens over time. For any brand or retailer, cracking this relationship code can be the secret to long-term success, especially in a cutthroat competitive category, like CPG or fast food restaurants.

As part of this research, I have been thinking about my favorite brands and how I developed that relationship. Here are some of the affinities I have noticed in my life and how I developed them:

• My go-to soda is Dr. Pepper, since that is what my Dad drinks

• As a New Englander, my go-to coffee chain is always Dunkin’> Starbucks (always iced coffee, never hot)

• However, if I want an Iced Tea, I always choose Starbucks since that is the Iced Tea my mom drinks

• M&Ms are my favorite candy, as those are the first candy I remember eating

• I only wear Nike basketball shoes since that is what UConn has always worn

Just thinking through my preferences, many different things influenced my purchase affinity and loyalty. Family, location, awareness, trust, and more shape people’s decisions. Is there a trend or pattern brands and retailers can capitalize on? What is the science behind these decisions? Let’s dive in.

In terms of the initial purchase, here are some of the influences that stood out to me during my research:

• About 95% of the initial purchase decisions occur through automatic, emotion-dominated thinking rather than rational deliberation

• Emotions are what really drive purchasing. Just marketing attributes of the product, instead of the emotion of the product, will lead to disinterest from consumers.

• Consumers are often pushed by social proof, the anchoring effect (comparing to the first piece of information on the subject), the desire for self-expression or status, and being able to identify with peers or influencers

• Idealized marketing, which shows how the product will help consumers become the best version of themselves, resonates well

Takeaway #1: Emotion > Thinking in the initial purchase. I thought for initial purchases would be more rational, but that is usually not the case.

Now, on the more theoretical side of purchasing behavior, according to one study, it is clear that family and peers play significant roles in affinity development. That influence is due to a true understanding of what the person wants. The better you know a person, the better the recommendations (makes sense why personalization is such a hot topic right now). From the initial recommendation, then comes the purchase, and subsequent purchases. If the initial recommendation is strong, it will tend to match the lifestyle of the consumer. If it does, brands can expect a loyal customer with higher satisfaction and repurchase. Takeaway #2: Personalization is key to building lasting relationships since you can integrate into the consumer’s lifestyle, and the best personalization comes from friends and family.

Additionally, it is interesting to see how this feeling evolves and is nurtured over time. The initial traction is not enough, you need to build the relationship over time. That is why you have seen the rise in brand communities and loyalty programs, whether on specific separate platforms or via social media. According to another study, this engagement builds on brand affinity through shared values, personalized experiences, and active engagement. These are key pillars to deepening the emotional connection, which will then influence the initial purchase and long-term loyalty. Takeaway #3: New consumers resonate with a community (social media and/or specific platforms) built over time to influence the initial purchase and build subsequent lifetime value.

After diving into this topic, I think I have more questions than answers. From a purchase behavior pathway, it is clear that the first purchase is very emotional, relying on input from friends and family to personalize the recommendation. After the initial purchase, lifestyle fit and community really drive the subsequent purchases. Still, so many intangibles dominate this process. Because it is so emotion-driven, maybe that is why it is so difficult to quantify. Regardless, definitely something I am going to be thinking about further. As always, any thoughts, intros, or information on the subject are always appreciated!

Smackin’ Launches Halloween Multi-Pack

For a while now, there have been large snack packs that have several different types of single-serving, individually packaged snacks in one box. For instance, the Frito-Lay Doritos, Cheetos, and Lays snack pack is a staple example that comes to mind. However, until recently, the envelope has really not been pushed with these types of snacking, just relying on the classics. Now, with customers searching for value, on-the-go convenience, and Gen Z loving single-serve permissible indulgence (Tru Fru as a big example or anything resealable), these pack types are growing in popularity. Just look at Frito-Lay, which has at least 10 of these packs now, including one just focused on spicy items. The next frontier, I believe, for this packaging type is using it as a marketing occasion, as depicted by the Smackin’ founder above. Smackin’ is a sunflower seed brand founded by two college students that is focused on Gen Z and younger consumers. All they did was repurpose existing flavors and packaging, brand it Halloween-related, and now they are relevant in a moment that is not traditionally associated with salty snacks. I think every brand in the space should create 5-10 of these limited packs per year (Wellness, Easter, Summer, Halloween, Holidays etc. are some examples). It helps keep you front of mind with consumers, while giving you a fun reason to re-purchase an item or do an initial purchase. Luckily for brands and retailers, the next occasion is right around the corner with holiday advent calendars. When I worked in the alcohol space, these were super popular, and are slowly starting to spread to the rest of the CPG industry. What are some moments you would want to see a special pack for?

Sweetgreen Reports Earnings; Sells off Spyce

After going public in 2021, Sweetgreen has struggled mightily, with this quarter being no different. Sales were flat YoY, with EBITA and same-store sales falling as well. As Gen Z and Millennials pull back on spending, fast casual chains are being hit hard. Sweetgreen, in particular, which was already lagging Cava and Chipotle due to its perception of being overpriced and having a more limited menu assortment, has fallen further behind with this pullback. Sweetgreen is working to combat the value perception and broaden its product assortment with more limited-time offerings (LTOs), but it remains to be seen if this will be enough to reverse course. Additionally, Sweetgreen is focusing more on its core business, which is why it sold off Spyce, a restaurant automation startup it had purchased. Spyce developed the infinite kitchen that Sweetgreen is using to automate its labor. It reached a deal with Wonder, the purchaser, to license back the technology, so Sweetgreen will still be able to utilize the technology. The sale gives Sweetgreen $100M cash and $86M of Wonder stock, which it plans to utilize to “reinvest in key priorities and sharpen its focus on growth and profitability”. For Wonder, it continues to accumulate assets in the food tech space, all with the goal of having a vertically integrated, omnichannel food marketplace.

Toast and Uber Deepen Partnership

This week, Toast and Uber announced that they are deepening their partnership. In light of DoorDash’s move to compete head-to-head with Toast by offering first party white label storefronts for restaurants and reservations, it makes sense that Toast is looking for additional value for its platforms. Here are some of the aspects of the partnership:

• Build new tools that enable restaurants to attract new guests and retain existing ones

• Enable Toast merchants to run and manage promotions and local advertising on Uber Eats directly from the Toast platform

• Lower cost to operate by combining first and third-party ordering

• Implement their existing Uber Eats, Uber Direct, and Toast Delivery Services delivery integrations in Canada

• Launch an Uber Eats integration in Ireland and the United Kingdom

• Toast will also make Uber its preferred food delivery marketplace for Toast restaurants globally

Overall, nothing super groundbreaking yet, just clearly the ecosystem is being divided into different alliances. It will be interesting to follow along and see how this changes over time and what other additional developments or partnerships come to fruition.

Amazon Launches New Whole Foods Concept

Since its founding in 1980, Whole Foods has always been a place for natural and organic products, due to its very strict product criteria, which drew a specific, health-conscious focused consumer. Since the Amazon acquisition in 2017, it has always felt inevitable that they would move away from this ethos. After all, the goal of the Amazon marketplace is to be as mass market as possible, to cater to as many customers as possible, not just people interested in natural and organic food. This week, the latest effort to make Whole Foods more mass market was launched. At a store in Plymouth Meeting, PA, customers can shop Whole Foods' full selection alongside other groceries and everyday essentials all in one location. However, the “all in one location” part is a little misleading. As depicted in the video above, the Whole Foods shopping experience mirrors a typical experience, but the rest of the products can only be shopped online, so you are essentially placing a delivery or pick up order. There is integration in the store of tablets to purchase, which connects the two, but it still feels choppy. Setting aside the fact that this new format doesn’t really make sense for the Whole Foods brand, on top of that, it isn’t the best customer experience either. I totally understand why Amazon wants to participate in the grocery business, but the push to force Whole Foods to be something it is not feels like a big reason they are struggling.

Additional Links:

1. Kimberly-Clark to acquire Kenvue, the maker of Tylonel (read more here)

2. Trader Joe’s opens new store in Berwyn, PA (read more here)

3. Forward Consumer Partners makes a deal with Hormel Foods to spin out Justin’s Peanut Butter brand (read more here)

4. How CPG brands are leveraging TikTok Shop (read more here)

5. A deep dive into Toys-R-US (read more here)

6. How is AI transforming CPG distribution? (read more here)

7. & Pizza, a fast casual pizza restaurant, acquires Tijuana Flats, a Tex-Mex fast casual chain (read more here)

8. Bath & Body Works partners with Grand Central for a marketing activation (read more here)

9. Amazon sues Perplexity over AI shopping agents (read more here)

10. Allbirds focusing on new products to turn around the retailer (read more here)

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