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How do you maintain consumer loyalty in a digitalised world?

14 March 2022
Digital platforms that bundle products and services, such as Google Shopping or Amazon, have emerged in recent years as powerful intermediaries for brand suppliers. This is a challenge for brands that have largely lost direct access to consumers as a result. Marketer Nico Wiegand researched these emerging platforms and offers guidelines for brands to platformize and thus promote consumer loyalty.

With platformization, Wiegand describes a process in which companies establish a platform business model, providing the infrastructure and governance to enable transactions between two parties, for example suppliers and consumers. Put simply, the company does not (or not only) sell products, services, or content itself, but brings together those who offer something and those who demand something. Examples range from sharing platforms like YouTube, which bring together users that create and upload videos and those that watch them, or retail platforms like Google Shopping, where retailers and manufacturers offer products for consumers to buy.

Commercial brand aggregation platforms quickly became the primary interface for consumers, intermediating traditional product brands that had been building direct-to-consumer channels based on digital technologies. As a countermeasure, several established brands have built their own flagship platforms to regain control and foster consumer loyalty. Sports brands such as Nike, Adidas, and Asics, for example, have launched tracking and training platforms that allow for multi-faceted interactions between participants after or even independent of a product being purchased.

Wiegand and his co-authors suggest that such platforms provide value to consumers by essentially enabling them to crowdsource from and crowdsend to other participants, which makes platforms different from singular products or services. They developed a model, consisting of an assemblage of several building blocks, that responds to specific consumer needs and can offer a handle for brands that want to build their own platform business. The findings are primarily of interest to traditional product brands, helping them to manage the platform transition and compete in an increasingly digital world. However, the research also has implications for other companies that want to create fully-fledged digital platforms or partly integrate platform-based value creation into their strategy.

The research was published in the Journal of Marketing in 2022. Nico Wiegand is Associate Professor of Marketing at VU Amsterdam and teaches in the part-time MSc in Marketing

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