Brand loyalty is waning, a new report suggests, with shoppers now more likely to choose where to buy based on fulfilment and customer service.
More than a quarter (27.4%) of UK and US adults now feel no loyalty to any brand, while only 6% feel loyal to an ecommerce brand, according to The Loyalty Paradox report from digital transformation consultancy Kin + Carta and customer data specialist Edit. It questioned 2,000 adults in the UK and US via Censuswide about their attitudes to loyalty, personalisation and customer experience.
Loyalty to ecommerce brands was, indeed, below that shoppers felt to food and drink store retailers (21.5%) and finance (9%).
Rob McGowan, joint managing director at Edit, says: “These results suggest that while the ecommerce sector boomed during the pandemic, brands would be wise not to confuse habitual purchasing with perceived loyalty.
“Outside of ecommerce, loyalty towards financial products increased with age and, unsurprisingly, with those who have an income of £75,000 plus, with over 20% of respondents in this income bracket claiming loyalty to brands within the sector.
Some 43% of respondents suggested ‘a discount code or incentive’ would persuade them to sign up to brand communications, while 25% would like ‘exclusive products or first opportunity to purchase’, and Gen Z consumers saw “exclusivity” as particularly appealing, with nearly a third (30%) interested in ‘first opportunity to purchase’.
Rewards were seen as an appropriate trade off for sharing personal information, but more pragmatic considerations remain the most important consideration to younger audiences. Operational and customer service communications outweighed rewards as a ‘return factor’ for younger generations. 34% of Gen Z respondents, and 32% of Millennials said that they would be ‘deter[ed] from making another purchase if [they] cannot contact customer services via [their] preferred method’.
Karl Hampson, chief technology officer data & AI at Kin+Carta, says: “Our research shows that brands must not confuse repeat purchasing with “loyalty”. Instead, they should balance repeat transactional activity with how engaged the customer is across all interactions.
“Data will be key to this holistic measure, but equally brands must invest in the capabilities to understand the human behind the data. This means making data more accessible, insights easier to unlock and bringing your customer experience and data teams closer together so a shared understanding and strategy can be achieved.”