Spurred on by startups and the technology that these types of companies master with absolute mastery, innovation has ended up becoming a very important asset for brands , which supposedly must entertain the consumer with a plethora of novelties to prevent them from leaving with their money elsewhere. However, the truth is that the innovation that brands pursue so eagerly collides head-on with a rising phenomenon such as consumption by inertia . In the report “Entry and Profits in an Aging Economy: The Role of Consumer Inertia,” Gideon Borstein, professor of finance at the Wharton Business School.
Older consumers stick to the brands and products they already know
In general terms, Borstein argues in his top industry data research, older consumers stick to the brands and products they already know , which puts a damper on the entry of new companies on the scene and leads those with the label of be old acquaintances of the consumer to be able to increase prices without fear of scaring away their most veteran customers. Younger households (those whose members are between 20 and 34 years old ) display, on the contrary, less inertia than any other demographic group in 95% of the product categories examined by Borstein in his study. A young household is up to 20 percentage points more likely to “re-optimize their product choice” compared to older consumers .
Consumption by inertia takes on particular importance in the current environment
The conclusions of the research BX Leads undertaken by Borstein emphasize the difficulties that new brands that decide to break into an already existing market encounter , but such conclusions also have marketing ramifications. After all, brands already established in the market have larger consumers at their side, who are reluctant to buy other products even when there are cheaper alternatives on the market . This circumstance is very relevant in the current environment marked by rampant inflation . Given that older consumers tend to cling like hot nails to brands they already know, Bornstein concludes that newer brands should put younger households.