By Jamie Saucedo, Senior Vice President of Business Operations at PFS
When we think of brand loyalty, many of us will think back to a series of personal experiences built up over a series of physical in-store interactions. But what does loyalty look like in today’s digital world when in-store interactions are becoming few and far between? As high street footfall continues to decline, many could argue that we are also seeing brand loyalty start to crumble – or at least what it had meant in simpler times.
The stark reality is that loyalty and the brand behaviours rewarded by consumers have rapidly altered over the years. In a recent survey conducted by PFS, which took a pulse check of the wants and needs of shoppers from 2021 to take forward to 2022, over one-in-five (20%) of consumers admitted to not feeling any emotional connection to a brand at all.
More interestingly still, the way brand connections are formed has also shifted. PFS’ research found that despite 51% of consumers agreeing that brand experience is often better in-store than online – when brand connections are made, it seems that they are stronger online (38% compared to 23% offline/in-store). 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 realm, 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 for money are more important than ever
With rising living costs, inflation and now rocketing energy costs set to hit every 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, 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. 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 has become table stakes
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.
- The conscious consumer shouldn’t be ignored
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.
Rebuilding loyalty…one C at a time
2021 was another challenging year for retail, dealing with the ongoing impacts of the pandemic and Brexit, and battling through a sea of shortages – from raw materials to labour and infrastructure. Amid this turbulence, retailers and brands need to recognise that brand loyalty is no longer what it once was. To appeal to and build loyalty with today’s consumer, cost, convenience, and consciousness around sustainability need to be brought to the forefront of operations – and that involves providing a range of options around delivery and returns that seamlessly integrate across commerce channels. Those who acknowledge these changing consumer preferences and behaviours will be rewarded by consumers in 2022 and beyond.