Loyalty is usually defined as a strong feeling of support or allegiance towards something or someone. It’s also something that apparel retailers consider to be in short supply these days: a mid-2014 survey suggested that ‘maintaining customer loyalty’ is the biggest challenge for 50% of apparel retailers. But what do shoppers think being loyal is? What can retailers aim for and expect?
- The state or quality of being loyal.
- A feeling or attitude of devoted attachment and affection
Within the last couple of years, new strategic areas of focus have emerged as clothing retailers try ever more urgently to combat their shoppers’ addiction to price: customer engagement, customer experience, loyalty programmes and personalisation to name a few. All are aimed at increasing customer loyalty in order to grow customer lifetime value, and to reduce price-sensitivity.
Fits.me recently commissioned a survey of over 2,000 shoppers (or consumers) in which it explored the relationships between these strategies, to better understand what consumers understand and expect and to explore the relationship between these different consumer strategies. Here’s what we found out and what we can conclude about loyalty and customer experience.
Clothing retailers and brands are generally believed to be facing a crisis of shopper loyalty; a mid-2014 survey cited 50% of fashion retailers as saying that ‘maintaining customer loyalty’ is their biggest challenge. However Fits.me’s survey [conducted for us by Redshift Research] found that only 16% of consumers are loyal to no clothing retailer or brand and that 71% of shoppers consider themselves loyal to one, two or three clothing retailers or brands.
It seems improbably, therefore, that shopper loyalty is in an unsalvageable state of decline as most people are still loyal to a small number of retailers. What seems more probable is that as shoppers have so many choices, that it’s very difficult for most retailers to secure the loyalty of a significant proportion of the population. To make it into the Top 10 of the Loyalty Index in our survey, a retailer needed to achieve just one in forty mentions (i.e. 2.5%). Lest there be any doubt, then, the challenge for every retailer is to find ways to increase an individual shopper’s loyalty to them specifically.
Emphasising the challenge facing retailers in respect of loyalty, only one in seven respondents claimed always to be a loyal customer of their favourite retailers. Two-thirds of respondents admit to either shopping around for the best price (29%), shopping around because online makes it easy to do so (20%), or shopping without thinking about specific brands or retailers (16%). Loyalty is sure not set in stone and cannot be taken for granted – it must be earned
When asked which factors would most likely improve their loyalty to a retailer, 29% of shoppers answered: ‘it stocks clothes that fit my needs and preferences’ – the single largest response. That this is obvious – it is, after all, what retailers aim to do on a daily, weekly, monthly, seasonally and annual basis – should be of no comfort: almost three in ten shoppers explicitly agreed that this is not, currently the case.
The implication is that the sources and techniques that retailers use to stock the right clothes in the right sizes in the right volumes in the right places is far from fool-proof.
In turn this suggests that retailers could benefit from knowing their customers better: knowing every individual shopper’s attributes also means knowing your shopping demographic as a whole. There is a certain virtuous circle in having sufficient data to enable personalisation at an individual level also yields population-level insights.
In view of retailers’ fears about the dominance of price as a purchase driver, it would have been reasonable to expect ‘price’ to be at the top of the list as a loyalty driver – it isn’t. Nor is it the second most popular response: in fact, the second most popular driver for increased loyalty was ‘it has consistently better quality products for the price than others’, with just over one in five shoppers agreeing. This is clearly an expression of ‘value’ rather than outright ‘price’ and should encourage retailers: shoppers will buy if they perceive incremental value for money.
‘Price’ is, however, the third-most popular response.
Throughout the survey, ‘self-interest’ responses such as price tended to outscore any concept that retailers could be doing more or better for customers, including ‘obvious’ personalisation; retailers will have to work harder if they want to reduce the importance of price.
From these results it is clear that there is a gap in the market for retail brands to offer their customers a much more personalised service in order to increase sales and encourage brand advocacy. Consumers generally do not like to be marketed at but would like something that makes shopping online quicker and easier for them through relevant and personalised alerts.
By ensuring they are collecting key data in an open and honest way, and then designing, making or ordering the stock in the right volumes and right sizes to meet demand, retailers will ensure customers are more satisfied with the service they receive. Couple this with timely and relevant personalised communications about items that meet the preferences the customer has specified, and retailers will ensure they are meeting demand and encouraging more purchases. After all, that’s what every retailer ultimately wants.