More than ever, customer loyalty is key to retailer success. But what do consumers really want? Emerchantpay’s Angus Burrell takes a look
The decisions retailers make now will greatly influence the loyalty that customers show them in the future. In times of challenge and uncertainty, it becomes evident which businesses are on the side of the consumer and are actively working to create a safe and engaging shopping experience for them. Cultivating a customer-centric approach to business ensures you are consistently making decisions based on the consumer’s needs and preferences.
The importance of customer loyalty
Loyalty equates to repeat custom. Providing a consistently high-quality service means that consumers know what to expect and are more likely to shop with you again and again. Consumers can be fickle and one bad experience can leave a long-lasting impression and cause them to look elsewhere. However, on the flip side, happy customers can go on to become brand ambassadors, referring your business to their network, resulting in increased sales.
Although customer loyalty is undeniably the goal for most retailers, often it is most effectively achieved by not directly pursuing it. Perhaps slightly dramatic, but a pushy approach to gaining trust can be off-putting. Focusing, however, on making every step of the shopping journey consumer-centric can be much more beneficial. Intuitive decision-making based on the experience you would like to receive as a customer goes a long way to securing loyalty. But, how do you make this work in reality?
Contextual awareness is vital, and this doesn’t just apply to the wider, global climate but also having an understanding of where and how your customers want to shop. Increasingly, the preference is for a flexible and unified shopping experience with customers wanting to shop seamlessly however they may choose. From a retailer’s perspective, this entails building a purchase flow that can be executed across multiple touchpoints. Customers want to be able to browse in a physical store and have the option to buy in the moment or consider the purchase and pay online. Whatever the customer journey may look like, it needs to be frictionless and free of pain points that may result in the transaction being abandoned.
Additionally, consider the role that social media can play as it’s a great platform to engage with customers, offer support and ultimately cement customer loyalty. Not only can it be used to reveal a more personal side to your business, but it’s also an important sales tool to drive customers to your website or store. Furthermore, it can be a useful way of bridging the gap between the physical and digital, for example, publicising offers on your social media for your high-street store.
Experiential retail vs traditional loyalty schemes
With society’s ever-increasing engagement with social media, brands must be aware that a customers’ loyalty is driven by different triggers than it once was, not least with our highly informed Millennials and Generation Z shoppers. Loyalty has been a key component of retailers’ strategies for a long time now and there is unfortunately no ‘silver bullet’, except that it does pay to take a keen interest in doing everything possible to understand your customer; namely who they are, what they want and why they want it.
Loyalty schemes come in a number of guises, none more familiar to us all than the age-old ‘points scheme’. Whether it’s Avios with British Airways, Stamps on a Café Nero app, or Nectar points building up over time, are these solutions alone really suitable for today’s hyper-engaged and increasingly well-informed consumer who will be put off a future purchase because of the smallest of mishaps or errors? The answer to that question will be different for everyone depending on how you shop as an individual and what you look for in a brand, but I do believe that retailers would benefit from thinking a little more outside the box and taking the odd risk when it comes to loyalty.
Consumers want shopping to feel like a treat, not a chore, and merchants should look to cultivate an experience that extends beyond the traditional retail journey. Virtual and augmented reality headsets are examples of experiential retail as they encourage consumers to engage with your product or brand in a much more hands-on way. There is also the added bonus of enticing passing shoppers into your store with the lure of intriguing technology, as well as sign-posting that your brand is innovative and passionate about providing experiences for their customers.
In addition, co-branding partnerships are something which I believe are not done enough in retail. Think of the partnerships over the years which for different reasons have been successful, like Go-Pro and Red Bull (the partnership of two very different lifestyle brands targeting the fit, young and adventurous) or Nike and Apple (two giants, but what a stroke of genius for Nike to partner with Apple and create workout apps and compatible clothing products driving consumers to buy from both brands to track health and fitness). There are many examples of different brands coming together and increasing the value delivered to the consumer and as a result driving more sales and improving revenues.
Thinking further outside the box, I know a European shoe company whose ‘Club membership/ subscription’ will reward consumers with real-life packages like a Celebrity Chef at Home evening as a thank you for being a valued customer. This reward may appear completely unrelated to the purchase of a pair of shoes, but it highlights a great insight into this business, how it understands its consumers and the value that they place on experiences and lifestyle. By providing this bonus, the shoe brand puts itself firmly in the mind of not only their experience hunting consumers but increases brand visibility across their extended network on social.
There’s no perfect solution for customer retention but one thing’s for certain: excellent customer service, understanding your consumers, being brave, thinking outside the box and doing something different to be noticed positively, will all go a very long way towards making the decision for a consumer to buy from you again a whole lot easier!
Recognising payment preferences
The checkout is the final step of the customer journey and should be given careful attention to ensure the transaction is completed smoothly. Behavioural trends and using existing data to glean insights is crucial for understanding payment preferences. This could be discovering which alternative payment methods are the most popular and optimising around them or introducing mobile POS terminals as you’ve learnt that conversion rates are higher if consumers can pay anywhere on the shop floor. Customers don’t want to think about payments, so the priority should be building a flow which requires minimal effort from them and doesn’t disrupt their shopping experience.
Gaining a loyal customer base should be an ongoing process and each step of the consumer journey requires careful and continued attention. Businesses who don’t prioritise customer experience risk being overtaken by competitors who better fulfil the needs of consumers.
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