6 Critical Insights Into the Loyalty Rollercoaster Your Customers Have Been Riding and How You Can Bring Them Safely Back to Your Brand
Not long ago – just last November, to be exact – consumers were reporting that they were more brand loyal than they’d been the previous year. But then March came along. So did COVID-19. And many consumers panicked. They stockpiled. And soon, everyone was facing empty spaces on the shelves where their long-standing favorite products had once dependably resided. This stark, unexpected series of events prompted previously brand-loyal consumers to look elsewhere. It forced them to comparison shop. Sometimes these new adventures resulted in disappointing second-or-third choice purchases. But let’s be realistic, they have also, often, resulted in a seismic shift in product and brand loyalties.
Recently the discussion forum at RetailWire asked a panel of experts to tackle two urgent questions that every retail brand needs to address now:
- Do consumers think that retailers have risen to the occasion in recent months or have they fallen short?
- What can brands do right now to win back consumer loyalty?
Writer Caroline Jansen captured the 6 most compelling and insightful observations from that panel discussion in her recent article, “What COVID-19 did to customer loyalty.” You can read her entire piece below. She does a wonderful job of magnifying what I see as consumer hunger for empathetic, swift, and transparent care.
At Skybridge Americas, we have been helping build brand loyalty for some of America’s most recognized brands by delivering superior, seamless customer experience. If you would like to know how we can help you build greater customer loyalty, please reach out. We would love to talk!
What COVID-19 did to customer loyalty
As retailers grappled with out-of-stocks, research found that 75% of consumers opted to shop alternative brands.
By Caroline Jansen
Consumers recently have become more loyal to the brands they shop. According to a survey from e-commerce marketing platform Yotpo released last November, a quarter said they were more brand loyal than the previous year.
Helping to drive customers to return are a brand’s product, price point, customer service and its loyalty program. In recent years, several retailers, including Macy’s, Target, H&M and Nordstrom, added new options to their loyalty programs.
But when COVID-19 made its way to the U.S., many consumers strayed from normal shopping patterns and began stockpiling products. Amazon notified customers in March that certain household staples were out of stock as more consumers began shopping online. Amazon said in a statement at the time it was “working around the clock with our selling partners to ensure availability on all of our products, and bring on additional capacity to deliver all of your order.”
Costco CFO Richard Galanti similarly said in March that the company’s procurement team was working with existing suppliers and new sources in order to keep up with increased consumer demand and restock shelves.
But those out-of-stocks may be driving consumers to seek alternative brands. A McKinsey report found that more than 75% of consumers have tried new brands, places to shop or methods of shopping so far during the pandemic. Product availability was the number one reason consumers sought out new retailers or products in the past couple months, followed by better prices and promotions.
The most frequent problems experienced, however, aren’t necessarily the most detrimental to a customers’ loyalty to a retailer, according to a study from the Wharton School’s Baker Retailing Center and WisePlum. “[N]ot all problems are created equal in their impact on customer loyalty. In fact, the top 10 most frequent problems were different from the topmost damaging problems,” the report stated.
Among the most damaging problems experienced were a difficult returns process and a hard-to-navigate website or app, whereas the most frequent problems centered around the availability of products, the report found.
It’s how retailers and brands respond to such issues that helps protect the customer loyalty they’ve built with consumers.
The discussion forum on RetailWire asked its BrainTrust panel of retail experts the following questions:
- Do you think retailers have risen to the occasion in recent months in the eyes of consumers or have they largely fallen short?
- What do you see as the best ways for retailers to “win the loyalty” of consumers at this point in time?
Here are six of the most insightful comments from the discussion. Comments have been edited by Retail Dive for length and clarity.
Mistakes happen, but they need to be fixed
Neil Saunders, Managing Director, GlobalData Retail: Having things go wrong does not destroy loyalty per se. Not addressing, fixing, and apologizing for those things is what causes resentment. Amazon recently messed up one of my deliveries by sending it to the wrong house. A simple web chat that lasted three minutes resolved the issue and new products were sent out (a full refund was also offered). I was impressed with the service and it made me more loyal to Amazon – and more likely to renew our Prime membership – because I know Amazon will correct any mistakes that are made. And mistakes do happen, no matter how good the retailer.
A frictionless end-to-end experience will create loyalty
Ken Morris, industry thought leader: It has been a mixed bag with some retailers rising as others have fallen. Inventory issues have many causes from supply chain interruptions to antiquated legacy systems. Perpetual inventory in real-time has not permeated retail yet. Synchronicity from stores to the web to wholesale are required to compete against Amazon, that is their secret sauce, but technology investments by brick-and-mortar retailers to achieve that end have not been made. Reserving inventory, returns management and frictionless service are the way to win and keep your customers.
READ the entire article here >
-Bobby Matthews
Senior Vice President, Sales and Marketing
Skybridge Americas
bmatthews@skybridgeamericas.com
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