Many people will think of personal experiences built up over a series of in-store interactions when considering brand loyalty. But loyalty in the digital world is changing, and in-store interactions are becoming few and far between. So what does loyalty look like today?
As high street footfall continues to decline and the cost of living continues to rise – creating a strain on consumer spending – many would argue that we are also seeing brand loyalty start to deteriorate – or at least brand loyalty as we previously knew it.
The reality is that consumer preferences and shopping habits have changed dramatically over the past few years, and this should impact how brands look to foster brand loyalty. In a recent survey conducted by PFS, over one-in-five (20%) of consumers admitted to not feeling an emotional connection with a brand at all.
More interestingly, the way brand bonds are created has shifted. PFS’ research found that although 51% of consumers agree that brand experience is often better in-store– when brand connections are made, it seems they are formed stronger online (38% compared to 23% offline/in-store) this could be due to retailers utilising social media and email marketing campaigns to engage with their customers. This sentiment is echoed by 42% of respondents who agree they receive a more personalised experience online than in brick-and-mortar shops/stores, as they receive benefits such as personalised recommendations, sizing predictions and photo reviews.
So, with loyalty now leaning towards the online channel, what elements make up and define this now rare and precious commodity? Here we explore the three Cs that are set to impact brand loyalty in the age of the digital shopper – cost, convenience, and conscience…
- Cost and value are king
With rising living costs, inflation and now rocketing energy costs set to hit every UK household, this is expected to take its toll on consumer confidence and spending over the coming months. Cost, therefore, has never been more important for today’s shopper. In fact, unsurprisingly, according to PFS’ research, in the UK especially, shoppers are more driven by cost than brand loyalty (31%).
When looking at achieving the ideal online shopping experience in 2022, free delivery/shipping was reported as the ultimate preference for 66% of shoppers surveyed. Free returns are also a key factor – with 23% of respondents naming it as a key factor influencing last year’s purchasing decisions for multiple purchases from the same retailer[1]. ASOS has previously spotted this trend, offering ASOS Premier Delivery, their unlimited next-day delivery service for a flat fee.
Brands simply cannot afford to ignore such demands, especially with shoppers becoming increasingly savvy online. For example, customers can now easily use the internet to look for the best price and value for money. Tools such as Google Shopping have made it increasingly easier for consumers to quickly compare prices and delivery costs across a wide variety of retailers.
- Convenience is no longer optional
Whilst cost remains king – convenience is not too far behind when it comes to the top considerations for today’s shoppers. In fact, even where customers are loyal to a brand, it doesn’t necessarily mean that they will buy direct from their website or store, with 52% of consumers in the US and UK saying they don’t mind which website they purchase their trusted brands from.
Instead, consumers are increasingly turning to the most convenient option whether that be an umbrella store or marketplace offering a range of different brands. But what will define convenience in 2022?
According to PFS’ research, over half (54%) of consumers prefer to have multiple options to return a product. With 27% strongly agreeing with this statement, this is good news for retailers and brands that have invested in omnichannel operations to support consumer expectations for choice, following the 2020 peak period (between Thanksgiving and Cyber Friday). PFS’ previous post-peak research suggested that in 2021, retailers were planning to invest more into curbside pick-up (30%) and growing their ‘buy online, pick-up in-store (BOPIS) capabilities (24%).
If retailers get this investment wrong, however, it can be a real turn-off for consumers – with two-thirds (67%) of shoppers admitting that they are put off a brand entirely if the returns process is too difficult. This puts nurtured customer loyalty and advocacy at risk.
- Conscious buying is more important than ever
Last but by no means least, there is the conscious consumer to consider. Sustainability in retail is an area that simply cannot be ignored by brands when building loyalty. However, it has become apparent that both consumers and retailers are struggling to make sustainable shopping behaviours and purchasing decisions a reality. The aforementioned C – cost – is one factor to blame here with 34% of consumers agreeing that the higher cost of sustainable products was holding them back from making more eco-friendly purchases. This notion was further emphasised by 63% of shoppers agreeing that buying a sustainable product is important, but so too is getting the best price.
Cost vs. convenience is certainly a tricky balancing act, but it is one that must be urgently addressed as discussions around sustainability continues to rise. To capture loyalty, brands must also ensure that their sustainability efforts or credentials aren’t going unnoticed as concerningly, a quarter of consumers surveyed revealed they find it difficult to understand which brands actively support such initiatives. This is reflected by 17% of consumers not knowing if the brands they shop with use recycled/recyclable packaging or offer a sustainable packaging option.
Building awareness and actively promoting sustainable practices will therefore be vital for brands to ensure that consumers are able to make more sustainable choices, whilst building loyalty with the more environmentally conscious consumer.
Brand loyalty 2.0
The last year brought big challenges for retail – struggling to recover from the continued effects of Brexit and then the pandemic, and battling through a never-ending wave of shortages including raw materials, labour and infrastructure. Amid all of this, retailers should also be considering what effects these disruptions have had on the consumer. Brand loyalty is no longer defined in the same way and to appeal to and build loyalty with modern-day, tech-savvy consumers, cost, convenience, and consciousness are key. Providing a wide variety of options around delivery and returns that seamlessly integrate across commerce channels, seems to be the most highly desired, and those who acknowledge and cater to these changes in preferences and behaviours, will be rewarded in 2022 and beyond.
[1] For leisure or non-essential items
