THE STATE OF CUSTOMER DEVOTION IN RETAIL

PART ONE

THE OBJECTIVEWe were intrigued to

discover how customer’s devotion to retailers is

influenced by loyalty strategies.

THE METHODOLOGYTo discover more about

devotion we conducted a survey of 7,291 retail consumers

across 9 countries.

ABOUT THE RESEARCH: Research undertaken by Survey Sampling International across 7921 consumers across 9 countries, on behalf of ICLP, July 2016. Random error on a sample of this size is +/- 2.2% at the 95% confidence level. If you would like us to present this work to you, then please contact us.

Don’t get dumped by your customers:Creating true devotion by learning from real-life relationships

Shoppers say they don’t get anything in return for personal data

Study shows 95 per cent of Emirati customers would cheat on their favourite retailers

Retailers struggle

to secure true

customer devotion

THE HEADLINES “What’s in it for me?”: Three quarters of Emirati shoppers say they get nothing in return for sharing their personal data with brands

For love and loyalty: 6 signs your customers may be cheating on your brands

Customers

becoming less

committed to

brands!

OF EMIRATI CUSTOMERS ARE DEVOTED TO THEIR PREFERRED RETAILERSDevoted consumers are your most loyal customers. They engage with your communications, act as brand advocates and will always choose you over a competitor.

WHY IS DEVOTION SO LOW IN RETAIL?

feel that brands fail to recognise them as long standing customers

say they do not get anything in return for sharing their personal information

are not rewarded when they recommend a retailer

think brands do not listen to their opinion on how to improve service and products

feel that their preferred brands do not have their best interests at heart

5%

78% 70%

77% 63%

76%

ONLY

GLOBALLY, CUSTOMER EXPECTATIONS ARE CHANGING Retailers must think beyond discounts and points to create memorable experiences relevant to their customers.

expect to feel valued (not just like every other customer)

of customers expect retailers to put their needs first

expect their data to be protected

expect their loyalty to be rewarded

97% 96%

96%94%

THE LEVERS OF DEVOTIONHere’s the first three of the Seven Core Relationship Criteria

RECOGNITION

RESPECT

TRU

ST

REL

IAB

ILIT

YCO

MM

UN

ICATIO

N

REWARDS

RECIPROCITY

Customers want retailers to really understand their preferences so that they can receive relevant offers and communications. This will empower them to be able to make better purchasing decisions.

RECOGNITION: ARE YOU FAILING TO RECOGNISE YOUR CUSTOMERS?

81%

72%

85%

of sporting goods retailers are still failing to remember their customer’s previous purchases

of fashion retailers don’t make relevant recommendations for products and services that interest their customers

of supermarkets fail to recognise their long term customers

• Amazon is customer obsessed

• Personalised email marketing using data from previous purchases to send relevant product recommendations and offers

• Recognise customer pain points to add convenience to the online shopping experience with smart site usability, fast day delivery, easy checkout with your preferred payment preferences and free returns

RECOGNITION: GET IT RIGHT LIKE AMAZON

• With customers willing to share so much of their personal data, brands must take this knowledge and insights to ensure their offers, service, payment methods and delivery options are tailored to their customers preferences

• Retailers that leverage existing customer data to personalise experiences and build deeper relationships will achieve a competitive advantage

RECOGNITION: RETAILER INSIGHT

Respect is hard to build as retailers need to have a strong position on what it stands for. The brand needs to project integrity and authenticity without compromising core values to make a sale.

RESPECT: DO YOUR CUSTOMERS RESPECT YOU?

61%

65%

50%

of customers do not feel that fashion retailers brands stand for a set of values or ethos they admire

of customers do not feel that supermarkets treat their personal data with respect

of customers believe that electronic retailers do not have their best interests at heart

• Lush introduced subscription services and a fan club programme to grow their member community

• Lush are working towards identifying individual customers when they walk in store, enabling staff to engage on a more personal level and have more meaningful conversations

• Lush promise to use their customer data to benefit their fan club members with instant rewards, ensuring they feel valued

RESPECT: LUSH FAN CLUB INTRODUCED TO DRIVE LOYALTY

• To achieve respect, retailers need to understand customers key values and aspirations in order to project a brand that their customers can relate to

• Companies that are respected by their customers often see an increase of repeat purchases or store/online visits

RESPECT: RETAILER INSIGHT

Company reputation is built on trust between retailers and their customers. If trust is broken, then customers will take their business elsewhere.

TRUST: HAVE YOU BROKEN YOUR CUSTOMER’S TRUST?

51%

50%

55%

of customers trust fashion retailers and what they stand for

of customers trust electronic retail brands to put things right if they go wrong (compared to 45% of sporting good retailers, 43% of fashion retailers, and 40% of supermarkets)

of customers trust the advice and recommendations of electronic retailers

• Building a community of like-minded beauty lovers who have a deeper connection to the brand

• Sephora’s global card programme, tiered based on member’s points status, gives member’s access to personalised offers, invitations to exclusive events and sneak previews to products before anyone else, bringing them into to “the ultimate world of beauty”

• Engaged members receive e-newsletters to keep them informed about the latest trends and beauty places

TRUST: SEPHORA PROMISES MEMBERS A NEVER ENDING BEAUTIFUL JOURNEY

• Demonstrate values that your customers identify with

• Put the customer first when dealing with a problem

• Open, honest dialogue with customers to meet their expectations and deliver consistent experiences

• Trust fosters a connection that will lead to recommendations and brand advocacy

TRUST: RETAILER INSIGHT

The winners in loyalty will be those that can incorporate these tactics into their loyalty strategy.

If you are interested in hearing more about this research and discuss your own loyalty strategies, let’s start a conversation today.

© ICLP Worldwide 2017

YOU CAN REACH US VIA EMAIL SHUSHANTG@ICLP-DUBAI.COM

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