To earn consumers’ lucrative loyalty, show them some love. Like any lasting relationship, retail companies can connect with shoppers by showing they understand their needs and consistently making efforts to delight them. These efforts can pay off, as investing in loyalty can help retailers and brands improve top line sales, reduce acquisition costs, and maximize lifetime value per customer.

According to KPMG, when customers are loyal:

  • 86% will recommend a company to friends and family
  • 66% are likely to write a positive online review after a good experience
  • 46% will remain loyal even after a bad experience.1 The truth about customer loyalty. KPMG. 

Although more than 70% of Millennials and Gen Z consumers belong to loyalty programs, loyalty has been in decline in recent years.2 Morgan, Blake. 50 Retail Innovation Stats That Prove The Power Of Customer Experience. Forbes. May 21, 2019. The pandemic compounded the problem, as McKinsey found 77% of Americans have adopted new shopping behaviors, including trying different brands and retailers, and they intend to stick with them over the long term.3Survey: US consumer sentiment during the coronavirus crisis. McKinsey & Company. August 28, 2020.

To prevent consumers’ wandering eyes and wallets, let’s look at some practical ways retail companies can earn consumer loyalty.

How suppliers can attract ardent fans

Successful suppliers boost loyalty by reflecting consumers’ needs and lifestyles in the following ways.

Celebrate small brands

According to Nielsen, in recent years leading consumer packaged goods (CPG) brands generated only 25% of value growth vs. 45% for small and medium-sized brands, suggesting that Small is Big. Agile smaller brands have proven comparatively faster at adapting to consumers trends, including conscious eating and healthy lifestyles.4 Kopka, Udo, Eldon Little, Jessica Moulton, René Schmutzler, and Patrick Simon. What got us here won’t get us there: A new model for the consumer goods industry. McKinsey & Company. July 30, 2020.  By supporting artisan suppliers, online platform and bohemian paradise Etsy also won big. The site saw a 93% surge in gross merchandise volume in the second quarter, which even excludes a spike in demand for homemade face masks during the COVID-19 pandemic.5 Fox, Matthew. These are the stock market’s 5 e-commerce winners of the COVID-19 pandemic, according to one Wall Street firm. Business Insider. September 16, 2020.

Local networks

To contrast retail’s regional Davids with multinational Goliaths, more suppliers are launching local campaigns to engage nearby consumers and retain jobs within their communities. For instance, online marketplace Cinch Market chose the tagline “Shop Brooklyn, Not Bezos,” to emphasize its support for local Brooklyn businesses and its same-day delivery in the area. Collaborating with local businesses helps Cinch Market and its partners reduce logistics costs and keep revenues close to home.6 Ryan, Tom. Will locals choose Brooklyn over Bezos? RetailWire. September 14, 2020.

Targeted campaigns

To satisfy growing cravings for plant-based meats, vegan brand Greggs launched a wildly popular digital campaign to “own Veganuary” and debut a new product in time for new year’s resolutions. Within seven weeks, the brand’s sales grew 14%, its organic Twitter reach hit 24 million, and Greggs’ social community grew 23%.7Vizard, Sarah, Charlotte Rogers, Ellen Hammett & Molly Fleming. The best marketing campaigns of 2019: Part I. MarketingWeek. December 3, 2019. Similarly, suppliers can target relevant online communities like fitness enthusiasts or new mothers to boost the likelihood of establishing long-term relationships. Targeted campaigns can also keep consumers connected by offering discounts, early access to deals and loyalty rewards programs. 8 Harris, Craig. How to ace customer loyalty in tough times. Retail Customer Experience. September 17, 2020.

Influencer marketing

The booming influencer marketing space is worth an estimated $6.5 billion, up from $4.6 billion in 2018.9 The State of Influencer Marketing 2019: Benchmark Report [+Infographic]. Influencer Marketing Hub. February 19, 2020. Beauty influencer Huda Kattan skilfully leverages her massive Instagram following of nearly 48 million fans to fuel excitement for her own beauty brand. Suppliers can also collaborate with micro-influencers, who typically have 1000 to 10,000 followers, to review or sponsor their products to amplify a brand’s reach among its desired audience.

How retailers can keep customers coming back

Retailers encourage repeat visits by adapting to consumers’ evolving needs in the following ways.

Subscriptions

As online shopping surges, Walmart recently launched its own subscription program, Walmart+, to make its e-commerce site even more convenient and appealing. The subscription includes two-hour delivery, discounts on gas and an efficient mobile checkout feature.10 Sciarrino, Joanna. Walmart Plus: Everything You Need To Know About The New Walmart Delivery Service. Forbes. September 15, 2020. Similar to rival subscription Amazon Prime, Walmart+ has a membership fee, which allows retailers to capture more recurring revenue and data insights. By delivering added value through subscription programs and refining their personalized marketing with consumer insights, retailers can understand and offer what shoppers want, and even become part of consumers’ frequent habits.

Private label

According to McKinsey & Company, 34% of consumers spent more on private label products during the pandemic, and 44% of them cited affordability and better value as motivation.11 Fox, Rich, Maura Goldrick, Carson Green and Aaron Rettaliata. Redefining value and affordability in retail’s next normal. McKinsey & Company. June 15, 2020.  By adding private labels to their assortments, retailers gain greater control over their supply chain processes, efficiencies and margins. Offering these exclusive products can also boost consumer loyalty, especially if the private label lines offer unique quality, affordability and innovation.

In-demand assortments

COVID-19 created volatile, unexpected spikes in demand. As homebound consumers suddenly went all Martha Stewart and Molly Maid, Bed Bath & Beyond earned a 400% year-over-year jump in bread maker sales in April and vacuum sales doubled within a single week. Consumer and competitive data insights help retailers promptly adapt to fluctuations in demand, pinpoint bestsellers and minimize out-of-stocks. As demand shifts, successful retailers use insights to re-evaluate their inventories, prioritize products with the highest return on investment and adjust their assortments to satisfy even frantic shoppers.12 Harris, Craig. How to ace customer loyalty in tough times. Retail Customer Experience. September 17, 2020.

Collaboration is key

The pandemic has motivated retailers and brands to collaborate more to integrate their retail processes, and avoid bottlenecks and out-of-stocks to improve the customer experience. Working together to ensure responsive consumer-centric strategies, product quality and reliable service can help retail partners gain consumers’ trust, which is essential to deserve their devotion over the long term.

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1.  The truth about customer loyalty. KPMG. 
2.  Morgan, Blake. 50 Retail Innovation Stats That Prove The Power Of Customer Experience. Forbes. May 21, 2019.
3. Survey: US consumer sentiment during the coronavirus crisis. McKinsey & Company. August 28, 2020.
4.  Kopka, Udo, Eldon Little, Jessica Moulton, René Schmutzler, and Patrick Simon. What got us here won’t get us there: A new model for the consumer goods industry. McKinsey & Company. July 30, 2020. 
5.  Fox, Matthew. These are the stock market’s 5 e-commerce winners of the COVID-19 pandemic, according to one Wall Street firm. Business Insider. September 16, 2020.
6.  Ryan, Tom. Will locals choose Brooklyn over Bezos? RetailWire. September 14, 2020.
7. Vizard, Sarah, Charlotte Rogers, Ellen Hammett & Molly Fleming. The best marketing campaigns of 2019: Part I. MarketingWeek. December 3, 2019.
8, 12.  Harris, Craig. How to ace customer loyalty in tough times. Retail Customer Experience. September 17, 2020.
9.  The State of Influencer Marketing 2019: Benchmark Report [+Infographic]. Influencer Marketing Hub. February 19, 2020.
10.  Sciarrino, Joanna. Walmart Plus: Everything You Need To Know About The New Walmart Delivery Service. Forbes. September 15, 2020.
11.  Fox, Rich, Maura Goldrick, Carson Green and Aaron Rettaliata. Redefining value and affordability in retail’s next normal. McKinsey & Company. June 15, 2020. 

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