Cost of consumer disloyalty rises to £147.2bn

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The total cost of consumer defection in the UK’s retail industry has risen to £147.2 billion this year, as shoppers become less loyal to individual retailers.

According to the Unfaithful Consumer State of the Nation report from Webloyalty and GlobalData Retail, the total potential costs from defection of dissatisfied customers has risen from £120.6 billion two years ago, to nearly £150 billion.

Nearly one in five consumers would reportedly stop shopping at a retailer if they thought it was involved in irresponsible practices like tax avoidance, poor staff welfare or environmental negligence.

Price is understood to be the number one factor affecting loyalty, while 58.5 per cent of consumers said staff rudeness would lead them to defect, alongside 45 per cent citing poor quality items as main factor.

The study also revealed a rise in the number of retailers consumers use to do their shopping, with the home furnishing and electrical sectors showing the highest rises.

“This research shows that shoppers have more choice and price transparency,” Webloyalty Northern Europe managing director Ben Stirling said.

“As a result of this, they are increasingly fluid in their loyalty and they have little tolerance for poor service.

“It’s perhaps unsurprising that they’re motivated by price and quality but it’s interesting to see ethical considerations entering the fold too. Over the last year in particular, there’s been increased scrutiny on environmental issues, especially with the recent plastics debate, while issues with employee welfare and zero hours contracts have also been highly criticised.

GlobalData Retail’s managing director Neil Saunders added: “It’s interesting to see in this year’s report that the DIY sector boasts the strongest customer loyalty.

“This could be attributed to the fact that DIY retailers have yet to successfully transition to online sales as customers shopping for home improvement products value in-store consultancy – which they just can’t find online.”

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