Customer loyalty has always been top-of-mind with retailers. And the swift changes in consumer behavior prompted by the pandemic have definitely affected that loyalty. In fact, according to a recent McKinsey report on consumer sentiment, 75% of consumers in the U.S. have changed their shopping behavior. Recent studies suggest that 60% of these behaviors will stick around. 

Here are three significant consumer behavior changes that will likely have a lasting influence on retail customer loyalty:  

1. Consumers are more open to switching brands. 

As most stores shuttered and supplies of favored brands dwindled, consumers were forced into shopping at different stores, both online and in limited in-person locations, and trying unfamiliar brands. Consumers are researching and comparing products online and are more comfortable with the idea of trying new items. 

2. Consumers are hopping channels.

As online purchasing skyrocketed, more consumers than ever before became accustomed to omnichannel research and transactions. Consumers returning to physical shopping expect stores to offer online transactions and interactions that complement and enhance the total shopping experience, before entering the store and as they shop. 

3. Consumers are more conscious of price and value.

Job losses and income reductions during the pandemic prompted many consumers to tighten their budgets. Not only that, but pandemic down-time allowed consumers to consider how brands are taking action to improve society and sustain the planet.  Consumers are paying attention to brand and corporate values and differentiation while also seeking truly good deals. 

Taking action to address these trends can prove positive. Bain & Company research shows that a 5% increase in customer retention can increase profitability by 75%.  

Loyalty vs. Retention

To be clear, loyalty is distinguished from retention. Building loyalty is how retailers attain retention. They are different. 

Loyalty is a strong feeling of support or allegiance, faithfulness to commitments or obligations. Since it is from an Old French word meaning legitimacy, honesty, and good quality, it’s safe to say that these are the qualities retailers must instill in customers to motivate them to “keep the faith.”

In today’s omnichannel-active, digital-first world, a smattering of discounts and a points-to-rewards program won’t cut it anymore. Alyssa Raine of Walgreens Boots Alliance put it this way: “We’ve shifted how we look at loyalty overall. Rather than it being solely about getting a discount or sale price, we look at it in terms of ‘How can we connect one-on-one with our customers and patients?’” 

Five Ways to Cultivate Customer Loyalty

Customer loyalty must be cultivated with a thoughtful, well-orchestrated approach that encompasses meaningful, memorable connections. Here are five ways to connect with customers in a way that will cultivate customer loyalty:

Be engaged. Consumers don’t merely want to transact business; they want to interact with your brand. This calls upon retailers to leverage technology to elevate customers’ in-store experience, facilitating a seamless transition from digital connections to human contact. If their move from digital-to-physical interactions with retailers is disjointed or inconsistent, customers lose faith in your brand.  

Embrace the power of live video chat, text messaging and other apps to sustain customer involvement.  Implement interactive displays to provide product demonstrations. Stay up to date on innovations that will create immersive experiences. 

In Reimagining Stores for Retail’s Next Normal, McKinsey and Company advises, “Unless stores offer consumers a compelling value proposition, store traffic—which was already thinning in pre-coronavirus times—will slow to a trickle. In-store omnichannel integration will become “table stakes” in the next normal. In our survey of U.S. apparel executives, 76% said they plan to improve omnichannel integration in stores.”

“Today, our customers expect a seamless, fully omnichannel journey to match their shopping needs anytime, anywhere, and from any device. We believe that the future of the beauty retail experience lies in bringing the best of both worlds together.” Martin Brok, President and CEO, Sephora 

Be personal. Gather data on consumer behavior and past purchase patterns and use these insights to nurture a personal relationship with each customer. Extend an online ‘welcome mat’ that gives each customer a relevant reason to come into the store, based on their individualized channel and product preferences. In enVista’s 2020 Customer Engagement Survey, 72% of consumers indicated that personalized customer service from a sales associate is an important factor in determining where they choose to shop. 

Ensure store associates know how to respond to customer questions and are adept at communicating with customers and suggestive selling.  

Got an in-store mobile app? Is your store AI-enabled? Use these to encourage customers to buy products based on their previous purchases or bundle products at a bargain price. At checkout, remind customers about any special perks they may be eligible for, including any rewards through your loyalty program. Treat each customer as an individual and forge an emotional bond between them and your brand. 

When asked about customer support preferences, 72% of consumers ages 18 to 64 in a UJET survey said having the ability to text with a live agent in real-time would improve their overall customer service experience. 

“Shoppers lean on mobile and digital technology to support and personalize their in-store journeys. Shoppers crave control and ownership over their in-store experience.” Piers Fawkes. Founder, PSFK 

Be transparent. Global social networking gives consumers access to a never-ending supply of information, comments, and opinions about every imaginable product and brand. Companies can no longer hide behind public relations platitudes when they falter in some way. Own up to marketing errors, product faults, and corporate missteps. Be up-front about out-of-stock items or extended delivery times and delayed shipments. Assure your store policies are well-publicized and understood. Be forthcoming when it comes to your stance on social issues.  

Be confidential. Recent major data hacks and cybersecurity breaches have given rise to greater concerns regarding the privacy of personal information. A study by the international Internet Society found that 69% of worldwide consumers are concerned about the use of personal data on mobile apps. Ensure you have strong information security policies and procedures in place, and let your customers know of your efforts to maintain high security and privacy standards. Customers like doing business with retailers that instill trust. Some 44% of respondents in a recent McKinsey survey said they don’t fully trust digital services. Increasing privacy and security is a mandate for every business going forward, not just retailers. 

Be a good citizen. Social responsibility is good business for retailers. Your brand’s support of everything from the local little league team to social justice movements, broadly conveyed through social media, of course, can resonate with civic-minded consumers and help make your brand stand out from the crowd. More than 2 in 5 U.S. adults said they have started or stopped using a new brand over its response to racial injustice, with younger adults at the helm. Nearly 3 in 5 of those ages 18 to 34 reported doing the same, showing that younger buyers pay attention to a brand’s social stance—and react with their wallets. 

Interestingly, these five traits—being engaged, personal, confidential, transparent, and a good citizen—mimic those that you would certainly admire and respect in a good friend. When you kindle friendships with consumers you have a better chance at keeping them for life. And it has been proven time and again that it costs far less to keep a current customer than to attract a new one. Take advantage of the return to physical shopping by adding a friendly, human face to your brand and customers will come through your doors again and again, hopefully, arm-in-arm with friends and family.

Let MarketSource show you how to retain customers through our approach to sales acceleration that has increased revenue and market share for major retail brands. LET’S TALK >>