With Black Friday looming, it may be a time for marketers to consider the inherent nature of consumer switching behaviour, as new research reveals that one in five UK consumers agree that they can “no longer afford to be loyal” to brands.
Almost two-thirds (64%) say they have changed their attitude to loyalty because of the cost of living crisis, with 56% having already switched from a brand they were loyal to as a result of the pressures and increased inflation.
More than half (56%) of respondents will cut their loyalty to a shop or brand as a result of price rises, reported Emarsys’ second annual Customer Loyalty Index, which includes a survey of 2,000 consumers. While 55% will be lost if they were put through a difficult shopping experience, meaning that in the current climate, price and convenience is likely to trump loyalty.
It’s not all bad news though. 73% of consumers still consider themselves loyal to certain retailers or brands, compared to 55% last year.
For those brands that are concerned about the state of (the nation’s) loyalty as a recession looms, there are potential ways to keep a hold on their customers. Seven in 10 of those surveyed said that they are more loyal to retailers that offer discounts, incentives and rewards – but that comes with a caveat.
Providing these offers and rewards in a personalised way that targets their needs is crucial, as is being sure of great customer service. So while price has more place in the loyalty arena than perhaps before, if the offer is personal, and relatable to their financial needs, consumers are more likely to stay put, the research suggests.
With a third (34%) saying they have switched brands due to a poor customer experience, and almost six in 10 citing a difficult shopping service as a reason to trade, including “halting free returns”, brands have a lot to consider when it comes to keeping their customer base – and keeping them happy.
Mark Choueke, retail expert and author of the index, commented: “To drive meaningful customer loyalty, customer-centricity is no longer enough. Brands and marketers must now aim for customer obsession. Marketers have to really get to know each customer and internalise their habits and preferences through all the provided data. v“That level of understanding includes knowing when, where and how individual consumers like to shop, and being able to personalise the routes they take on their customer journey. Shoppers want retailers to travel with them as they scour both physical and online stores, all the time wrapping the experience around them.”
Which sectors need to fight harder for loyalty?
Only a third of consumers would look to try and stay loyal to their food brands if a recession hit, but this is still higher than every other sector – which saw a woeful figure of less than 10% saying they would look to remain with brands. More than one in four (28%) specifically told Emarsys that they wouldn’t look to try and stay loyal to any industry.
Across most sectors, older consumers were more sensitive to price increases when it came to keeping their loyalty. 58% of those aged 55 or over saying they would stop buying from clothing retailers if they increased their price by 25%, compared to four in 10 of those aged 25 to 34. Almost two-thirds (64%) of those in the older age bracket felt the same when it came to food and grocery retailers, compared to the 45% at the younger end of the respondent pool.
Across the board, clothing and fashion was the sector most likely to retain loyalty – cited by 55% of those polled, compared 29% of shoppers for beauty and skincare products, and just 17% for food delivery.
The impact of ethics
While the research found that just 4% highlighted “affinity with values” as a reason to stay loyal to brands (compared with the 56% driven by price), there were stark differences by age group when it came to sentiment around ethical propositions.
Almost a third (31%) of those polled aged 16 to 24 agreed that they are more loyal to retailers with strong moral or ethical values – compared to 18% of consumers aged 55 or over. But just 12% of the older age group say they have switched from a brand because of their sustainability practices, compared with 34% of those aged 25 to 34, and 42% of those aged between 16 and 24.
Controversy concerning a key stakeholder in the business, such as a CEO or Founder, was also likely to influence switching behaviour among younger age groups, while less than one in 10 older consumers said this would make them change brands.