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Shopping for customer loyalty: how can retailers convert their one-off customers into long-term, loyal shoppers?
The retail landscape is more competitive than it’s ever been. From boutique fashion labels to DIY recipe box brands, new retailers are popping up regularly, and consumers are a lot savvier with where and what they splash their cash on.
So, it’s no surprise that businesses are rethinking their brand proposition to make sure they still appeal to their customers, meet their needs, and genuinely enhance their lives in a meaningful way.
Online shopping has become the norm for many UK consumers. And it can simply be put down to one thing: convenience. Access to businesses' brilliant range of products and services is just the click of a button or tap of a phone screen away.
But does online shopping actually give the customer the same level of customer service they want, and does it lead them to buy what they've got in their basket? Or does online shopping leave a lot to be desired?
Our new research – conducted among 2,000 UK consumers – digs into what makes Brits tick when it comes to retail and what makes them stick or shop around.
We found that nearly three-quarters of Brits (74%) are loyal to supermarkets, and that's down to the success of their loyalty schemes, competitive pricing, and quality products. With so many consumers being loyal to their supermarket, it’s no surprise that they come top of the class for loyalty when compared to other sectors like fashion retail.
The research uncovers the differences in the retail sector, revealing a staggering two in five Brits admit they’re not loyal to fashion retailers, and just one in 10 believe it pays to be loyal.
When it comes to ranking customer loyalty across various sectors, the data shows that only the insurance sector has worse customer retention than fashion retail, with banks, energy/utility suppliers, and mobile providers all ranking higher.
This is how consumers rank the various industries it pays to be loyal to:
1. Retail (supermarket).
2. Mobile provider.
3. Food service and restaurants.
4. Finance (banking).
5. Hotels and hospitality.
6. Travel (airlines, trains).
7. Utilities (gas and electricity supply).
8. Insurance (home, car, life, health.
9. Telecoms (landline, at-home broadband).
10. Media (streaming services - TV, music, entertainment, etc).
11. Retail (fashion).
12. Leisure (gyms, cinemas).
When asked what makes Brits cut ties with a brand, almost two-thirds (60%) said bad interactions impact their loyalty to a brand, while one in five would leave a brand if they engaged in unethical practices.
Ranked in order of importance, the factors likely to result in increased loyalty to supermarkets are:
1. Reliable/good quality product/service (27%)
2. A loyalty scheme (26%)
3. Good customer service (22%)
4. Receiving regular offers relevant to them (18%)
5. Ethical business practices (12%)
Ranked in order of importance, the factors likely to result in increased spending with fashion retailers are:
1. Reliable/good quality product/service (21%)
2. Good customer service (17%)
3. Receiving regular offers relevant to them (15%)
4. A loyalty scheme (15%)
5. Ethical business practices (14%)
What’s more, our research shows that over 12 months, the average consumer spends 38% less with fashion retailers when compared to supermarkets. As retailers continue to see spending increase following the pandemic, it's crucial for businesses to think about the financial strain their consumers face. Now more than ever before, shoppers have more options when it comes to where to spend their money thanks to the rise of e-commerce.
Ranked in order of importance, the factors likely to result in increased spending with supermarkets are:
1. Reliable/good quality product/service (27%)
2. A loyalty scheme (26%)
3. Good customer service (22%)
4. Receiving regular offers relevant to them (18%)
5. Ethical business practices (12%)
Ranked in order of importance, the factors likely to result in increased spending with fashion retailers are:
1. Reliable/good quality product/service (21%)
2. Good customer service (17%)
3. Receiving regular offers relevant to them (15%)
4. A loyalty scheme (15%)
5. Ethical business practices (14%)
It’s pretty clear there are some big differences when it comes to customer loyalty in the retail sector. There’s a real opportunity for fashion retailers to take a leaf out of the supermarkets' book on customer retention.
From offering quality products and loyalty schemes to aligning with customer values, there are lots of factors that help to sway a customer’s decision on where to shop and whether or not to stay loyal. The perfect retention strategy should cover all bases and provide the right balance of price, perks, quality, and customer service.
So how can retailers – both fashion and supermarkets – guarantee customers choose to spend their money with them?
Learn more by downloading our Shopping for Customer Loyalty report below.