Science has shown that companies that establish an emotional connection with consumers tend to develop a strong degree of brand loyalty. This connection results in better, longer-lasting relationships, stronger bonds, and ultimately repeat business.
That's the premise behind the 2020 Brand Intimacy COVID Study, by branding agency MBLM (pronounced "Emblem"). The report, now in its 10th year, is "a study of brands based on emotions during the pandemic." According to the report, "Brand Intimacy is the emotional science behind the bonds we form with the brands we use and love." The full study is scheduled to be released Wednesday morning.
Here are the three most "intimate" brands, as identified by the study.
It isn't too surprising that Apple (AAPL -1.51%) is the brand consumers feel the strongest connection to. Apple customers have long been fiercely loyal. When it comes to technology, consumers just want their devices to work, and no smartphone maker gets higher marks for customer satisfaction than Apple.
A recent survey found that Apple ranks highest in customer satisfaction, at 82 out of 100, according to data compiled by the American Customer Satisfaction Index. It isn't just the iPhone, either: The company gets top scores for its iPad notebooks and Mac computers as well.
Unparalleled customer satisfaction and a strong emotional connection have helped make Apple the most valuable U.S. public company, currently clocking in at $1.93 trillion. And even as other companies slumped into the red during the pandemic, Apple generated double-digit year-over-year growth. Revenue grew 11%, while earnings per share grew 18%, both records for the June quarter.
MBLM's managing partner, Mario Natarelli, gave additional insight into the iPhone maker's performance: "Apple is a powerhouse and leads in many measures, top for fulfillment, enhancement, ritual, highest fusing score, the highest ranked brand for 'Can't live without,'" Natarelli noted. "Almost 40% of Apple users said their emotional connection to the brand increased during COVID, and 55% of customers said they used Apple more during the pandemic."
E-commerce was already enjoying significant adoption before the onset of the pandemic, but widespread lockdowns made online shopping the rule rather than the exception. Customers pivoted en masse to digital retail, and no company has a bigger presence in e-commerce than Amazon.com (AMZN -3.01%).
Entire households came to rely on the arrival of the smiley-faced boxes, rather than going out in public and risk contracting the coronavirus, so it's understandable that customers would ratchet up their feelings of brand loyalty for the "Everything Store."
Amazon has been one of the stronger performers since the onset of the pandemic, with its growth accelerating in each of the previous two quarters. Net sales grew 42% year over year in the most recent quarter, while net income nearly doubled -- even after spending heavily on COVID-19-related expenses.
"Some of us were surprised Amazon slipped from No. 1," Natarelli said. "While it managed the surge during the worst of COVID, some consumers were frustrated by pricing, availability, and delivery issues. Nonetheless, it is the second highest brand overall, and second highest for 'Can't live without.' Additionally, 60% of users said their emotional connection to Amazon increased during COVID. ... An overall very strong performance by Amazon, just not enough to beat out Apple."
Alphabet's (GOOGL -1.40%) (GOOG -1.39%) Google search engine was already the primary way people search for information, and with the onset of the pandemic, people needed updated information like never before. Google accounts for more than 92% of the search market worldwide, becoming one of the first companies in the digital age to become a verb. In addition, with its portfolio of nine Google products that claim more than 1 billion users each, it's easy to see how consumers became more entwined with the tech giant during the pandemic.
With the decimation of the advertising market so far this year, you might be surprised to find that Alphabet's revenue declined just 2% year over year and was virtually flat on a constant currency basis. The hit to the bottom line was a bit more palpable, declining more than 28%, the result of an increasing headcount and greater investments in cloud computing.
Google was "the biggest mover, up from 15th place in our previous study. Besides being a gateway of information, Google also shared, partnered, and promoted itself during COVID as a valuable resource," Natarelli said. "It was No. 1 for daily usage, and 57% of users said they used the brand more during the pandemic. Beyond Search, the brand's relevance has become further engrained in our lives with mail, photos, Meet, and numerous others aps."
He also noted that YouTube -- also owned by Alphabet -- ranked No. 5 in the study.
Here's why it matters to investors
It's important to note that the appearance of each of these companies isn't a one-time thing, as Apple, Amazon, and Google have made frequent appearances in the report in prior years. The study also reveals why the high-profile companies in this study should be on the radar of in-the-know investors (emphasis mine): "Top intimate brands have also continued to significantly outperform the leading brands in the Fortune 500 and S&P 500 (^GSPC -1.72%) indices across revenue growth, profit growth, and stock price during the first quarter of 2020, compared to the first quarter of 2019."
This study provides investors with one more tool to help identify a winning investment. There's a lot to love.