Is Brand Loyalty Decline a Buzz-Word or an Empirical Fact? A Longitudinal Analysis of Repeat Purchase Behavior in the UK and the USA

This research examines long-term loyalty change in a wide variety of packaged good categories in the UK and USA, over time periods between six to thirteen years. The study uses φ, expressed as S, the Dirichlet category switching parameter as the loyalty indicator. The findings provide mixed evidence. Only in 7 out of 15 UK categories and 2 of 6 US categories loyalty is slightly declining. Overall, the correlation between φ and the repertoire size is highly negative indicating that when the number of brands bought increases loyalty decreases. Loyalty decline appears to be product category-specific, rather than a universal phenomenon, and furthermore appears to be a very slight and slow process. The more the number of products (SKU) increases, the less loyal consumers become as the repertoire size rises.