Lightbox Loves: The Growth of Disloyalty

It might sound controversial, but the future of customer loyalty looks to reside in low commitment. Where once the long-term contract reigned supreme, there has been a rise of subscription or pay-as-you-go models, such as gyms, TV services and mobile phones. In July 18 subscription TV services overtook traditional pay TV models[1] . It’s time for other industries to pay attention.

This gap between the purchase and committing spend has proven to actually encourage an increase of overall purchases. In the fashion world, Swedish firm Klarna partnered with ASOS to allow shoppers the freedom to buy, but only pay once they’ve decided to keep the product, up to 30 days later. The benefits for the brand a consumers alike were clear, as order values increased by 30% and spend by 34% [2]. Similarly, Amazon’s Prime Wardrobe is also following a similar model, giving customers 7 days to try up to £750 worth of clothes before purchase.

New challenger brands in the mattress industry embrace the “try before you commit” culture, with many offering 100 night trials. The likes of Eve and Simba have already taken a 5% share of the market, with a predicted 20% still to come over the next 3 years. Sales of Eve mattresses specifically have grown 100% from 2017 to 2018, and, perhaps more surprisingly, return rates have fallen[3]. As our own QT shows [4], 70% of consumers like to touch and feel furniture before they buy, an extended trial period can only help with this.

The temptation and freedom of such trials encourages people to buy and keep products, they might not have picked them up in the first place if payment was upfront. A recent trends report[5] proposes that if companies can emphasise the ease of exit/entry to their services they can actually maintain long-term loyalty.

It’s difficult to see what this would look like for other industries, but that’s not stopping some, even from the least engaged-with industries. Energy and insurance providers have started enabling consumers to switch whenever they want, benefiting from and fuelling this rise in disloyal loyalty. Consider the services you use and the brands you encounter, and think if there could be a new way to engage with them.

[1] https://www.ofcom.org.uk/about-ofcom/latest/media/media-releases/2018/streaming-overtakes-pay-tv

[2] https://www.theguardian.com/money/2018/nov/17/klarna-buy-now-pay-later-system-that-is-seducing-millennials

[3] https://www.theguardian.com/business/2018/mar/23/sleepy-world-of-retail-mattress-sales-gets-rude-awakening

[4] The QT – November 2018, the7stars propriety consumer tracking study

[5] https://www.foresightfactory.co/2018/01/11/this-is-what-brand-loyalty-looks-like-in-2018/

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