With inflation continuing to rise and the UK economy continuing to struggle, how can retailers drive growth? The key it would seem is working on loyalty – but not focussing on some sort of points scheme, but truly creating meaningful and long-term relationships with customers.
It may sound like a “duh, tell me something I don’t know” moment, but several separate pieces of research out this week suggest that, yes, loyalty programmes are becoming increasingly important, it is more how you use them to create really meaningful relationships with consumers that is what will really count.
Today’s shoppers are not linear in their approach to shopping, combining on and offline in a way bespoke to the moment in which they happen to be acting. They are also very much not looking for a rapid and transactional-only relationship, but more are wanting to build a meaningful, multichannel relationship with retailers.
According to Craig Summers, Managing Director UKI at Manhattan Associates, “Shopping is no longer a simple act of practical consumption: it is an opportunity for self-expression and often a signal of virtue through a choice. This is underlined by the fact that 77% of shoppers say they would prefer options that allow them to select a delivery method based on speed, cost and sustainability, whereas only 50% of retailers provide this capability currently.”
More presciently, as Summers points out, shoppers don’t see channels the way retailers do. They simply shop. For brands, embracing a digital-first philosophy doesn’t mean giving up on physical retail, it simply means amplifying and fusing both physical and digital together seamlessly.
This involves understanding them in a really detailed way, which in turn needs data and AI. Breaking into exactly how they shop at any given point is vital.
The same applies too to subscriptions services. While subs offer a way of building inherent loyalty – tying the customer to the brand for a regular transaction – these offerings perhaps more than others need to respect the kind of relationship the shopper has with the brand.
According to a study by subscriptions management platform Recurly, there were an estimated 44 million new subscriptions taken out in the UK over the past 12 months. But here too, to keep these rolling along, the relationship has to be more about helping the consumer, not just transacting with them.
According to its survey, Recurly finds that Ease of cancellation (84%), free trials (82%), free gifts (70%) and exclusive products and services (66%) all attract consumers to subscribe. Consumers also prefer financial loyalty incentives through lower subscription prices (76%) and discounts (74%).
This is indicative of just what all modern retail revolves around. While loyalty is essential to help grow business in these tough times, what that looks like is not just accruing points for questionable benefits. It is actually all about relationships – and as we all know, they take a lot of work.
