Consumers in the US and UK are showing less and less loyalty towards their favourite brands than ever before, with 27.4% showing no brand loyalty at all.
This data comes from a recent report conducted by Edit and Kin + Carta. The report, titled The Loyalty Paradox, shows that 2021 was the year in which consumers started moving away from their brand-loyal behaviour of the past.
After the strong years of growth, the e-commerce sector has experience since the start of the pandemic, many companies would be forgiven for assuming this trend equated to an increased predictability in the loyalty of customers within their market.
One of the key authors of the report, Rob McGowan, was quick to point out the follow, however:
‘These results suggest that while the e-commerce sector boomed during the pandemic, brans would be wise not to confuse habitual purchasing with perceived loyalty’.
This is a key takeaway to consider. Correlation does not equal causation; just because people are buying your product now, this does not mean they’ll continue to do so just out of a new-found loyalty to your brand.
How does one go about buying a customer’s loyalty in the first place?
Gone are the days when big advertising campaigns could buy the loyalty of the masses – so too are the days of just buying whatever mum bought. The consumer sphere in 2022 is so rammed full with competition and different avenues of advertising that brand loyalty might even seem like an unattainable goal to some.
But crafty companies are already pursuing hugely successful methods to ensure their customers’ loyalty. Take the rise of the loyalty card and rewards schemes, for example.
In a world where one has access to a different café on every street corner, how is one shop supposed to stand out against the others?
Five free coffees evert day? For just £20 a month? But that would cost me £180 without the subscription card!
This is the route Pret A Manger has taken to ensure its customers’ loyalty, and other chains like Starbucks are following close behind.
The fact of the matter is consumers want something in return for their loyalty now – no longer is it good enough to receive a high-quality product – now an actual reward must be given to secure that sought-after loyalty.
The battle for customer loyalty has always been the main drive of most marketers. The consumer landscape has changed almost entirely in the last 50 years, however, with cheaper and more inventive products flooding the market on a near-daily basis.
For brands to stand out, they need to create real value for their customers that makes them feel valued and exclusive in a meaningful way.
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%).