Speaker Series Spotlight: Is Customer Loyalty Dead in Retail or Just Resting?
One of the ongoing conversations in today’s competitive retail environment is about loss of loyalty in favour of convenience or price. Whilst customer loyalty isn’t entirely dead, it does require some serious attention. In a world where personalisation is now everything, customers are expecting more from their retail experiences.
True loyalty comes from creating a sense of community, not just rewards says Anastasia Lloyd-Wallis, COO and Head of Consumer Insights at Retail Doctor Group. “It requires a deep understanding of your customers on an emotional level, their needs, motivations and different drivers for shopping at your particular store,” she says. “Customers need to build loyalty beyond transactions and businesses need to know how to create an experience that has consumers walking past your competitor to shop with you.”
Anastasia was one of more than 30 speakers presenting on a wide range of business topics at the 2022 Naturally Good Expo.
Here are the key take-aways from her Speaker Series presentation – Is customer loyalty dead in retail or just resting?
What typically creates customer loyalty?
Customers are loyal to brands they have an emotional connection with. Up to 95 per cent of consumer decision making is done by the subconscious brain, so emotions drive consumer decision making much more than rational thought. Consumers are looking for brands and retailers that they can connect with who offer them an experience that meets their emotional needs. It needs to go beyond just the transaction.
Key stats when it comes to customer loyalty schemes
- 1 in 5 consumers are significantly influenced by loyalty schemes
- 92% of women are members of a loyalty scheme, 86% are men
- 75% of 18 -24 year olds are members of a loyalty scheme
- Gen Z and Millennials are more influenced
- 25-44 year-olds are significantly more likely to spend more when they are members of a retail loyalty scheme whereas 50% of consumers aged 65+ state a loyalty scheme has no influence on them
- 3⁄4 of consumers who are members of loyalty schemes say it influences their behaviour
- 3⁄4 of consumers aged between 25-34 are influenced by loyalty schemes in all sectors
- 95% of decision making happens in the emotional “limbic” brain
- Loyalty is an integral part of consumer behaviour. Review your existing loyalty scheme in line with your target consumer segments to ensure that it is aligned to their drivers to influence their purchasing frequency and transaction value. It’s not about the ‘what’ and ‘how’ more about ‘why’
*Source: Retail Doctor Group
Loyalty versus disloyalty
It’s a common misconception that consumers are less loyal in today’s market. However, research shows that customers are actually more loyal now to products – as long as they’re the RIGHT brands! Primarily they’re looking for brands that deliver an experience. So, with the gap between transactional retail and experiential retail growing, it can be misinterpreted as consumers being dis-loyal if you are playing purely in the transactional space and have no customer care factor.
The key to a great store experience – less friction
Consumers have different needs based on their personality profiles and all have very different objectives for both online and instore. But one thing that’s becoming increasingly common is demand for a ‘frictionless’ experience. Time is so much more valuable to consumers these days so having an online or instore experience that values your time in paramount.
Why personalisation is important
Consumers want to be treated as individuals. ‘One size fits all’ retail is no longer valid for a demanding customer. Retail personalisation provides every shopper with a unique journey across every single touchpoint and channel, and businesses that fail to do this are at a disadvantage. Effective personalisation should be based on historical data and real-time shopper intent, powered by customer and product intelligence.
Future predictions and retail-tainment
Consumers want to connect with retailers more than ever. They want to be part of a community and feel a sense of belonging. We’ve seen this in the rise of local retail and increased loyalty – people want a reason to leave the house and connect with others. The increase of experiential retail showcases a new need for ‘retail-tainment’. Consumers want to be entertained and be part of something and this will become increasingly important in years to come.
Thanks to our speakers for being part of the 2022 Naturally Good Speaker Series. If you would like to read more key take-aways from our Speaker Series sessions, subscribe here for regular updates. You can also download Anastasia’s presentation here.