The UK economic downturn has seen some high profile names exit the UK’s High Streets. Stalwarts such as Woolworths and Comet have fallen victim to the recession and serve as a stark warning to other retailers. The post-recession landscape now sees a financially-squeezed customer base that is far cannier about where it spends its money. Combine this with an increase in outlets and shopping options and consumers are exercising their choice more frequently than ever before. How can High Street brands adapt to these developments? The answer: brand loyalty.
Brand loyalty is fundamental to securing return custom at a time where consumers are becoming more exacting about where they spend their money. Effective customer service as well as competitive pricing is proving vital to ensuring brands secure an edge over their competitors, as well as maintaining both in-store footfall and numbers shopping online.
Companies like GAME offer customer service that is directly targeted for their customers. The GAME reward scheme provides points in the form of ‘Reward Accolades’. These accolades mimic awards provided in computer games: buy online and use your reward card and you’re a ‘Web Slinger’. Remain an active member of GAME for five years and you win the highest accolade of ‘Legendary Gamer’. Customers enjoy rewards which reflect on their interests, whilst GAME enjoys ‘legendary’ customers who remain loyal for years on end.
Other companies, such as Pets at Home, promote loyalty through the quality of service provided by employees or, as they are known within the company, colleagues. Of Pets at Home colleagues, 92 per cent own a pet themselves, which allows them to use their personal knowledge to offer a richer and more helpful experience to customer. Positive interactions between Pets at Homes customers and colleagues on the front line works wonders in developing a positive brand perception – with a loyal customer returning and recommending to others.
Loyalty cards have long been used by stores as a means to drive return custom. However, as a recent Forrester study has found, only 16 per cent of consumers are redeeming their loyalty rewards. Physical cards are often lost or left unused, meaning any impact on loyalty to a particular store goes awry. Mobile-app based loyalty schemes offer a means to avoid this issue, as they provide brands with the opportunity to communicate targeted offers to consumers, and thus drive a return to the store. By keeping loyalty rewards digital, the need for the customer to retain numerous loyalty cards from their favourite shops is avoided.
Mobile apps offering proximity marketing services can do just this for supermarket shoppers. Consumers add their shopping list to the app, and receive targeted offers when they arrive in-store. You want to buy milk? The app sends a message when you’re in the milk aisle letting you know a particular brand is currently on offer or discounted due to the loyalty points you possess. Services like this offer a targeted approach and help avoid delays at the till for customers redeeming physical coupons.
The potential for cultivating digital loyalty extends beyond mobile apps. Too many retailers see the internet as a threat when it is actually an opportunity to build customer loyalty; good online retail service is vital for driving customers through the doors time and time again. As SMG’s UK Customer Satisfaction report discovered, nearly 50 per cent of shoppers under the age of 18 – in addition to 22 per cent of 45-54 year olds – are “pre-shopping” online before purchasing in stores. Furthermore, successful pre-shopping results in a 15 per cent higher spend at the tills.
To generate and maintain brand loyalty, businesses must provide a seamless customer experience both online and in-store. John Lewis has taken steps to provide just this kind of retail experience, investing in new tills that can co