Saturday, Jun 3, 2023

Here's how to increase brand loyalty.

It’s a cliche to say Covid has changed everything, but like so many cliches it contains a grain of truth. A good example is the impact the pandemic..

It’s a cliche to say Covid has changed everything, but like so many cliches it contains a grain of truth. A good example is the impact the pandemic has had on our shopping habits and product purchases.

Across the board we’re more comfortable buying from an unfamiliar brand, and less loyal to brands we once loved. And for marketers, that’s a problem.

With the majority of physical retail stores closed during national and local lockdowns, online shopping naturally became the norm. This shift means that customer reviews, social media advertising, and newer shopping destinations like Amazon and Instagram have reordered how we evaluate and buy our stuff.

Instead of having a handful of choices, as per all but the largest physical store, we can now browse a gazillion options from our sofas and evaluate them with the help of online customer reviews.

And while that’s brilliant in many ways, it can make it harder than ever for brands to build lasting relationships with consumers. 

Right now, in 22 of the 47 countries we track, more consumers say they’d rather shop online than in-store.

This has led to a saturated, increasingly competitive online space, and as a result, the sort of brand loyalty that more or less everyone felt to some extent is largely a thing of the past. 

How to increase brand loyalty 

OK, enough about problems, let’s talk solutions. Brands need to attune themselves to the new consumer reality, so without further ado here are five actionable insights from our Zeitgeist research in the UK and US that can help businesses foster brand loyalty. 

1. Everyone loves a bargain.

With 8 in 10 consumers in the US and UK changing their shopping behavior in one way or another since the emergence of Covid, it’s clear the pandemic is having a profound and lasting impact. 

Economic uncertainty means people are hunting for bargains more keenly than ever.

Almost 4 in 10 actively search for discounts and offers more often, while around 3 in 10 are buying cheaper alternative products more frequently. Needless to say this savings-oriented mentality has had a profound impact on shopper loyalty.

Chart showing percentage of people saying what is important to them

In the past three months alone, over a quarter of U.S. internet users have experimented with new brands, and a fifth have visited different retailers. 

These figures jump significantly among shoppers who are actively hunting discounts, which shows they won’t think twice about switching loyalties at the first hint of dissatisfaction.

The fact that 31% of consumers have purchased a product on credit in the last four months suggests they’re looking to brands who offer some form of financial support, whether that’s promotions, discounts, or rewards. Brands need to acknowledge this extra hunger for a good deal and respond accordingly, because if the price is right people will still buy.

2. Adapt and survive thrive.

The reason consumers are less loyal to brands today aren’t all financial. In fact the same portion of people in high and low income groups say they’ve cut back on purchases because they’ve found a cheaper alternative.

While cost and saving have shifted brand loyalties they’re not the whole story, with people’s needs and priorities playing a part. Spending all day at home with limited opportunities for socializing means far less need for, say, a new outfit. Even when shoppers do indulge themselves, it’s less often than in pre-Covid times.

But in the spirit that every problem is an opportunity in disguise, brands can do plenty to help themselves make the most of all this, starting with embracing change.

Brands need to reposition their offerings to attract customers and win their loyalty.

For example, when ASOS experienced a serious drop in demand for formalwear and party clothing during lockdown, they capitalized on the surging demand for leisure wear, making staying in the new going out. The result was a stunning 329% rise in profits.

We can sum this up in one word: agility. Rapidly evolving in response to events is the key to loyalty and success. Essentially it’s iterative rapid prototyping – try something, improve it, try it again.

And in the end, what’s the alternative? Agility is increasingly the ticket to the game. 

If you’re not agile, you’re potentially exposed – as any brand suffering a collapse in consumer loyalty will tell you. 

Agility is:

  • Responding to change, not sticking to a plan.
  • Rapid iterations, not big-bang campaigns.
  • Testing and data, not opinions and conventions.
  • Numerous small experiments, not a few large bets.
  • Collaboration, not silos and hierarchy.

3. Find ways to mimic the real world.

Another challenge is replicating key aspects of the real world shopping experience online.

Choosing one product over another in a physical store often takes account of physical attributes like packaging, materials, ingredients (for groceries) and overall look and feel. Paradoxically, this stuff is just as important online when it comes to capturing – or recapturing – consumer loyalty. 

Brands need to go the extra mile to provide and promote a digital equivalent to the in-store experience.

That could mean anything from tucking a personalised message into their product packaging, to reaching out to people who post rave reviews on social media.

Whatever approach brands take, the goal is to be “front of mind”, so that consumers come back for another purchase and leave another positive review. It just takes imagination.

4. Build love with loyalty schemes.

When it comes to groceries and everyday household items, loyalty schemes really hit the spot.

Online grocery shoppers are 26% more likely than average to say loyalty schemes are important when buying a new household brand.

And because groceries are recurring purchases, consumers are more likely to get a long-term monetary benefit from repeat purchases – which of course helps increase brand loyalty.

Interestingly, we see less enthusiasm for brand loyalty programmes in the US, where only 7% of online grocery shoppers say they’re important compared to 22% in the UK. This discrepancy reflects the fact US brands are far ahead of their UK equivalents in promoting subscription-based services, which create brand loyalty by other means.

Regardless, as online grocery shopping grows in popularity, a subscription business model is an important weapon in the fight to build brand loyalty. Walmart in the US and Tesco in the UK have both launched a “Plus” subscription service offering additional rewards to those sign up, with the latter reporting almost £9 average increase per shop during the trial.

5. Take your tech to the next level.

Another challenge brands face when selling online is the ability to explain their products well.

Augmented reality (AR) may hold the key. So far uptake has been slow, but with 5G adoption gathering pace and in-store shopping taking a back seat due to the pandemic, AR-enhanced shopping has a unique opportunity to establish itself.

User demand for AR-enhanced shopping is higher than ever.

Around two-thirds of UK and US consumers are interested in AR, particularly buyers of high-ticket items who want to explore the product in detail before buying. In this situation, AR is the next best thing to a shop visit.

Chart showing percentage by generation of those who are looking for a virtual shopping experience

AR is equally useful in the FMCG sector, with 74% of personal care shoppers saying they’re interested. The beauty industry was already using AR pre-COVID, and the pandemic has only accelerated this trend, with MAC reporting a threefold increase in engagement with its AR try-on service over a 2 month period.

And when you consider that pandemic restrictions mean consumers often can’t physically test beauty products, an AR-based alternative becomes very attractive, making this tech a strong candidate for mainstream adoption.

And if you think it’s just big brands who can afford this then think again; the introduction of the “YouCam Makeup” app in Shopify means smaller D2C brands can get in on the action.

If AR was a nice-to-have feature prior to the pandemic, it’s now solving real pain points for consumers and businesses. 

Brands would be bonkers to miss out on building loyalty via what is essentially an extra layer of interactivity enhancing the shopping experience.

Brand loyalty gives you a strong base

Each of the five responses we’ve just described has the potential to increase loyalty; but combining some or all can create an exceptional customer experience that’ll keep them coming back for more.

Ultimately, brands need to think creatively and act quickly to showcase the value of their products online in a way that separates them from the noise. If they get this right they can’t go too far wrong.

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By: Roger Horberry
Title: Brand loyalty is down, here’s how to push it up
Sourced From:
Published Date: Fri, 04 Feb 2022 17:38:58 +0000

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