Return business and brand loyalty are the cornerstones of most industries. By providing a valuable product along with good customer service, businesses can build long-term relationships that will bring customers back. This is slightly more challenging in the modern age, where the internet provides consumers with an almost endless supply of potential retailers. Though it may be harder to achieve, brand loyalty is not dead. A recent study from InMoment reveals how today’s retail customers define brand loyalty in the face of endless options.
InMoment, a customer experience (CX) intelligence firm, surveyed more than 1,300 consumers U.S. consumers to produce their 2018 Retail CX Trends Report. The report notes that contrary to the popular belief among retailers, 83 percent of consumers consider themselves about the same or more loyal to brands than their parents, with nearly 30 percent of millennials reported being more brand loyal than their parents.
Since consumers still believe in brand loyalty, it’s important to look at the factors that can erode brand loyalty. According to the InMoment report, consumers who said they were less loyal than their parents were most likely to cite increased choices (54 percent), with a little over a third (37 percent) saying it was because they have more information.
Ironically, the things that can erode brand loyalty can also be used to build it. For consumers who reported being more loyal than their parents, 42 percent said it’s due to doing more research and having first-hand experience, with 35 percent saying its because they have a larger variety of choices. In a global marketplace where the quality of goods can vary widely, many consumers are inclined to stick with products they know are effective, bought from retailers they already trust.
The takeaway for business owners is that a key to building brand loyalty is to be transparent with information and to ensure that your brand’s offering have a unique and compelling value for your customers.
Brand loyalty still exists, but it’s different from days past. A key difference from previous generations is the drop in people who loyalty to only one brand. Among the InMoment survey respondents, only 17 percent classified themselves as “fiercely loyal” to a handful of brands (typically one per category). Some Apple users are a good example of this category of brand monogamists. Think of the person who own an Apple laptop, tablet, phone, smartwatch, etc.
The majority of the people surveyed for the report considered themselves to be loyal to multiple brands but only in certain situations. For example, while they may not purchase all of their fitness clothing from a single brand, they do buy their running shoes from the same brand. Modern brand loyalty is often connected to specific value offered by a product or service.
About one in four (23 percent) consumers say they aren’t loyal to specific retailers or products. Instead, these consumers tend to make purchasing decisions in the moment depending on new products/services, price, offers/sales, recommendations, etc. This is good news for retailers because these customers can easily be swayed to try new things based on a variety of factors.
“The holiday shopping season provides a great opportunity for retailers to begin building genuine relationships with their new and existing customers that last far beyond December,” said Andrew Park, senior director of customer experience strategy at InMoment. “The brands that stand out during the holiday shopping frenzy are the ones that have been listening to and collecting authentic and direct feedback from customers all year and use this feedback to inform experiences their customers desire most. Whether it’s as complex as a popular e-retailer opening a holiday pop-up store or as simple as offering layaway options, when customers recognize they’re a priority and co-creators of a brand’s reputation and value, they’re much more likely to be and stay loyal for the long haul.”
Make sure to give new and returning customers a shopping experience that they will remember and that will bring them back for more. Brand loyalty isn’t dead, it’s just a little different. And companies that can adapt to these changes can secure their business for years to come.
For more helpful research that can benefit retailers, read this article on how much customers are planning to spend for the 2018 holiday season.