Joint research from first-party customer data specialists Edit, and digital transformation consultancy Kin + Carta has revealed the impact of the pandemic on customer loyalty.
Edit delivers integrated data solutions, acquisition, and retention campaigns for some of the world’s most recognised brands. Obsessed with delivering attributable growth for clients, Edit’s mission is ‘to turn data into profit’ via combining technology, strategy and insight.
Headquartered out of Bath and London, the team is comprised of more than 120 data scientists, engineers, technology strategists and planners with revenues in excess of £12m.
The report, entitled The Loyalty Paradox shows that brand loyalty became a thing of the past last year with over a quarter (27.4%) of UK and US consumers showing no brand loyalty at all across any sectors.
2,000 respondents, split equally between the UK & USA, were asked multiple-choice questions relating to loyalty, personalisation, and customer experience, across a broad range of sectors.
E-commerce scored particularly poorly, with only 6% of consumers claiming loyalty to brands within that vertical. As the lowest scoring online segment, e-commerce brand loyalty was below that of finance (9%) and offline retail – food and drink (21.5%).
Rob McGowan, joint managing director at Edit said:
“These results suggest that while the e-commerce sector boomed during the pandemic, brands would be wise not to confuse habitual purchasing with perceived loyalty.”
Outside of e-commerce, 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.
In a digital-first customer journey, rewards are most likely to drive the sharing of personal data across demographics. 43% of respondents suggested a discount code or incentive would persuade them to sign up to brand communications.
A quarter (25%) would like ‘exclusive products or first opportunity to purchase’, Gen Z consumers saw exclusivity as particularly appealing, with nearly a third (30%) interested in first opportunity to purchase.
While rewards were seen as an appropriate trade off for sharing personal information, 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 ‘deterred from making another purchase if they cannot contact customer services via their preferred method’.
Rob McGowan continued:
“Brands cannot rely on loyalty any more. Brand affinity through emotional connection has weakened to be replaced by habitual ties based on lived and related experience with brands and retailers.
“Brands, therefore, need to ensure that they look at the individual customer, and how they interact with the business to understand their behaviours and encourage habitual purchasing. Consequently, brands should be looking at the customer journey as a whole, as well as spotting opportunities to innovate through data. Do it right, and there is an opportunity to retain more customers, as well as bringing in new ones”.
Karl Hampson Chief Technology Officer Data & AI at Kin+Carta said:
“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.”
The full report, developed alongside Censuswide, can be seen at edit.co.uk/customer-journey-research-report
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Find out more about Edit at www.edit.co.uk