If you had any doubt that America’s middle class is losing clout at the cash register …

If you're building a brand for consumers, your job will get harder next year. According to a recent Deloitte survey of 4,047 respondents encompassing 28 product categories and more than 350 brands, brand loyalty is declining. No surprise there, right. Our Charlotte marketing agency has been working at the forefront of this paradigm shift for years now. But what does come as a surprise, is that even in the third straight year in which brand loyalty has declined, private labels are thriving under these conditions: 88 percent of those surveyed report finding private labels that they believe are just as good as national brands. And only 27 percent say they will revert to national brands from private labels when the economy gets better.

That's one trend companies should be aware of heading into 2014, notes Pat Conroy, Deloitte's vice chairman and U.S. Consumer Products leader. Another trend is what Conroy calls a "recessionary mindset" from consumers: That is, a mindset wherein consumers say they will not increase their spending in 2014, even if the recession ends. The reason for the caution? Too many consumers remember being burned by the length of the previous recession.

So how should brand builders respond?

Conroy suggests thinking more carefully about the target markets for each brand in your product portfolio. Which brands target affluent consumers? Which brands target price-conscious consumers? In other words, brand segmentation seems to be the key, and Deloitte recommends that consumer products companies "rethink their product portfolio in light of the widening gap between the affluent and lower-income households" Says Conroy, "consumer products companies may need to have distinct strategies (e.g., brands, product offering, pricing) to target affluent and lower-income consumers."

So there you have it. Apparently the American middle class no longer constitutes a unique consumer segment that deserves it's own brands.  Sorry middle class. It appears there is no longer any middle ground. Or, in other words, if you can't afford to shop at Nordstrom's, then keep driving until you find a Cato.



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