Thursday, June 30, 2016

Most Patriotic Brands in America

As this is an election year, issues regarding “patriotism” have been raised to even higher levels of debate than usual. So – as it’s coming up on July 4th – it seemed an apt time to look at how consumers see brands when it comes to the value of “patriotism.” And a new Brand Keys survey of iconic American brands (in a variety of categories) has revealed which brands consumers consider the most patriotic.

Election years and holidays like Independence Day give marketers an opportunity to help citizens celebrate – and brands leverage – particular emotional values. In this instance, brand advertising and social outreach typically features patriotic flag-waving and red-white-and-blue motifs. Marketers cue the bands, the Sousa marches, and the Uncle Sam look-alikes all to leverage patriotic emotions – and, as this value doesn’t just reside in the voting booth, but the marketplace as well – this is all done in the cause of increased sales.

Who Were At the Top of the Most Patriotic Brands List?
A national sample of 4,750 consumers, 16 to 65, evaluating 248 brands across a collection of 35 cross-category values Consumers identified the following brands as leading 2016’s patriotism parade. Percentages indicate brands’ emotional engagement strength for the individual value of patriotism.
  1. Jeep/Disney (98%)
  2. Levi Strauss (96%)
Ralph Lauren (95%)
  4. Ford (94%)
  5. Coca-Cola/Jack Daniels (93%)
For a complete list of 2016’s top 50 Most Patriotic Brands, click here.

When it comes to engaging consumers, waving an American flag and having an authentic foundation for being able to wave the flag are two entirely different things, and the consumer knows it. Believability and authenticity are the keys to emotional engagement. The more engaged a consumer is with a particular emotional value and the associated brand, the more likely they are to trust that emotion and act positively on that belief. Where a brand can establish a real emotional connection, consumers are six times more likely to believe and behave positively toward the brand.

Armed Services Rate 100%
The Brand Keys annual survey focuses on for-profit brands, but every year we also look at the United States armed services – The Air Force, Army, Coast Guard, Marines, and Navy. Consumers gave all branches of the armed services a patriotism engagement rating of 100%. We recognize that again this year and thank them all for their service.

Brands Growing In Patriotic Appeal
The five brands appearing among 2015’s Top-50 Most Patriotic Brands that showed significant patriotic engagement growth included: Kellogg’s (+13), Converse (+11), McDonald’s (+10), Sam Adams (+9), and KFC (+5).

It is important to note that these rankings do not mean that other brands are not patriotic, or that they don’t possess patriotic resonance. Just not the kind of resonance the brands consumers placed in the top 50 exhibit. Rational aspects, like being an American company, or being ‘Made in the USA,’ or having nationally directed CSR activities and sponsorships, all play a part in the make-up of any brand. But if you want to differentiate via brand values, especially one as emotional as “patriotism,” if there is believability, credibility, and plausibility, good marketing just gets better. One thing marketers should have learned about 21st century brands is the ones that can make a meaningful emotional connection with the consumer always have a strategic advantage over competitors when it comes to the battle for the hearts, minds, and loyalty of consumers.

It’s been said that patriotism is not short, frenzied outbursts of emotion. When brands do that we call it “promotion,” not patriotism.

Based on this year’s collection of brands, one could reasonably agree that real patriotism is the quiet and steady dedication of a lifetime’s work. Look at the brands on the top of the list. That’s probably true about every one of the other 38 brands, no matter where you personally stand on the political spectrum.  Perhaps Mark Twain’s definition works best for everyone; “Patriotism is support for your country all the time – and the government when it deserves it!”   

But the real bottom line is, if you can make a real emotional connection, consumers will not only stand up and salute, they’ll also buy!

Happy 4th of July!

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Thursday, June 23, 2016

For Better Security, Dip, Don’t Swipe

With Father’s Day celebrations and gifting bigger than it’s ever been, and with all those June graduations and weddings, consumers have been using their credit cards more regularly for more purchases. In fact, it’s expected that this year U.S. credit card balances are approaching $1 trillion. That’s a 1 with twelve zeros following it.

Just to put that amount into some sort of perspective, a stack of a trillion one-dollar bills would be 60,000 miles high, about a quarter of the way to the moon. It would weigh a little over 10 tons. You could put nearly 9 million students through a 4-year college or buy every NFL franchise and have money left over to buy a few professional baseball, basketball, and hockey teams. So a lot of money.

This $1 trillion is very close to the high of $1.02 trillion consumers reached in 2008 and a sign that consumers are more comfortable carrying credit card debt. Also that banks are taking advantage of those circumstances trying to capitalize – and differentiate – their offerings – because credit cards are a really profitable line of business for them.

If you’ve gotten a new credit card recently you’ll probably have noticed a tiny computer chip has been added to the front of the card. That chip means your card is now equipped with EMV technology, which stands for “Europay, MasterCard, Visa” and has been around in Europe for a while now (hence the “Europay” in the name). The chip makes a card really, really hard to counterfeit, by creating a unique transaction code that cannot be used again, thus adding another layer of security in an era of hacking, phishing, scaling of firewalls, and identity theft, in an market environment where nearly 75% of Americans worry that their credit card will be stolen from a retailer they use.

Under the Fair Credit Billing Act your liability for unauthorized use of your credit card maxes out at $50. If just your credit card number is stolen, you’re not liable for any unauthorized use, and most credit card companies give consumers a pass on the $50 anyway as a sign of contrition and good faith.

Currently, according to our 2016 Customer Loyalty Engagement Index, when it comes to credit card security, here’s how consumers rank the card that has their biggest share-of-wallet:
  1. Discover/American Express
  2. Visa
  3. MasterCard
  4. Capital One
  5. Barclaycard

So consumers should be pretty happy with a change to a more secure card, right?
Right! They are – or would be – if they actually thought about it. Right now the only thing a consumer has to remember is that a card with an EMV chip doesn’t get its magnetic stripe “swiped,” the chip gets “dipped” into a slotted reader at the bottom-front of the credit card terminal and gets left there until the transaction is completed. So a minor shift in payment procedure, but more security, so good for the customer, right? Right. For the customer. But not so much for the merchant.

Merchants are being pressed to install and accept more secure EMV-equipped credit cards because as of October 2015, a deadline created by MasterCard, Visa, Discover, and American Express, merchants that don’t have the EMV process in place become the ones liable for any fraudulent chip card transactions. The merchants, not the banks. That means if a stolen or counterfeit card should have been EMV-slotted, but instead – because the EMV system hadn’t been installed in the store yet – gets swiped, the merchant is one responsible for the loss. That used to be covered by the bank issuing the card, so the responsibility has shifted to the least EMV-compliant party, in this instance the merchant.

Bottom line: The change is intended to make the payment industry EMV-compliant to avoid liability costs, something the credit card industry and the merchants have been fighting about for the past 10 years. The EMV chip cards, while more secure, require retailer to install new payment terminals, which also have a slightly longer processing time. But the scales tipped in favor of the credit card industry after the hackers scaled the firewalls of companies like Target, Sony, Anthem, Staples, Ebay, Neiman Marcus Home Depot, British Airways, and Kmart, and those were just a few of the high-profile hacks over the past couple of years. So the chip-based credit-credit card transactions should please everybody, right? Not so fast!

It turns out there have been objections. Home Depot just filed an antitrust suit against MasterCard and Visa that the merchants are paying too much for credit card transactions, adding new assertions – years after Home Depot and others had opted out of a$7.25 billion settlement regarding price-fixing ­– regarding the effectiveness of EMV chip cards, now contending that MasterCard and Visa conspired to prevent the adoption of a chip that also required a consumer to enter a PIN, because banks don’t want to add the necessity of a PIN at checkout. For what it’s worth, it’s interesting to note that banks collect higher merchant fees for transactions that require a signature than those that just need a PIN. Home Depot isn’t the only merchant that has complaints. A Federal court in Brooklyn, New York is handling cases filed by Wal-Mart, 7-Eleven, and Target.

The banks have been issuing new cards for about a year now, but only about 25% of retailers can process them and court cases regarding credit verification options increase if not exactly abound. So those who are not EMV-ready could face much higher costs in the event of consumer data breaches, and money (or losses of money) is something retailers are bound to listen to, because “money talks.”

And a trillion dollars actually yells!

Postscript: Shortly after we wrote up these findings, MasterCard and Visa made an offer to merchants who hadn’t started to accept the chip cards yet, indicating they would accelerate checkout terminal certification and limit costs retailers would have to incur for counterfeit transactions. Merchants have said that the equipment certification delay forces them to pay for fraud even when they have equipment in place. Some merchants and customers have complained that chip-card transactions take too long. Yet another example of how consumer expectations (B2C and B2B) are always on the rise, and how it can only help to better understand what consumers really want. And how your brand can really deliver.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Monday, June 13, 2016

2016 Father’s Day Buying Survey

A day born in memory and gratitude by a daughter who thought her father should be honored with a special day has turned into what’s expected to be a $18.8 billion retail holiday this year. That’s according to this year’s Brand Keys Father’s Day survey, a national poll of 5,800 men and women, 18-65 years of age, which asked if – and how –consumers were planning to celebrate Father’s Day. 

The 2016 average spend is up 6 percent this year, twice the increase from last year and equal to this year’s increase for Mother’s Day, which is good news. Steady economic conditions and consumer confidence are fueling holiday sales. This year’s survey also found a slight increase in the number of consumers celebrating Father’s Day this year (78%, +2%). Retailers are looking at an average spend of $157.00 to recognize Dad with relatively equal spends between Women and Men ($161.00 and $153.00 respectively).

Celebrants indicated they were looking to buy gifts in these categories for Dad with #s in parentheses indicating the percent-change from last year:

Gift cards                   40%    (- 2%)
Clothing                     35%    (+5%)
Tools                          20%    (- 5%)
Electronics                18%     (+2%)
Wine & Spirits           15%     (+5%)
Home Improvement  15%     (+1%) 
Sporting Goods         14%    (+1%)
Automotive                10%    ( - 0- )
Spa Services             10%    (+2%)
Smartphones               9%    (- 3%)
Books/eBooks             5%    (+3%)
DVDs/CDs                  2%     ( - 0- )

The biggest increases in gift choice were Clothing – Dad can always count on that perennial tie – and Wine and Spirits, mostly whiskeys, bourbons and scotches. We guess if you’re a Dad there are always occasions that call for a drink too! All other categories were relatively stable with only very slight decreases seen for Tools and Smartphones, both of which were up last year, so it all evens out. After all, how many phones (smart or otherwise) or hammers does Dad really need?

When it comes to “bricks and mortar” stores, and perhaps reflecting a willingness to spend a bit more this year, Specialty Outlets are up a little again this year. Department stores were down, continuing to reflect a general, marketplace retail trend. 

Department Stores  39%    (- 3%)
Discount Stores       36%    (+1%)
Online                      34%    (+1%)
Specialty Outlets     22%    (+2%)
Catalog                     1%     (- 1%)

In addition to the 70% of folks who intend sending send Dad a card (both e- and traditional), people intend to “connect” on Father’s Day at levels and outreach similar to those of last year, and pretty evenly distributed as regards “device”:

Phone                     52%                           
Personal Visits        30%                           
Online                     25%                           

In 1909, Sonora Dodd, raised alone by her father, listened to a Mother's Day sermon and conceived the idea for a Father's Day. She held a Father's Day celebration a year later and by 1956 Father's Day had been recognized via a Joint Resolution of Congress. In 1972, President Richard Nixon established a permanent national observance of Father's Day to be held on the third Sunday of June.

There’s an old saying, “A truly rich man is one whose children run into his arms when his hands are empty.” This year those children are bringing a few extra gifts to celebrate just that.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.