Whilst many Brits started the year with a renewed sense of optimism, the country is facing a difficult trajectory for the year ahead. Referring to the7stars’ own quarterly tracker, the QT, we know that the Brits are already starting to feel the impact of the rising cost of living, with 1 in 3 Brits are feeling less comfortable on their income than they did this time last year. Inevitably, this extra financial stress will result in a change to consumer purchasing habits which will have repercussions for brands and industries alike.
With the rise in inflation and cost of living, and customers becoming increasingly expectant of brands, loyalty will become pivotal in retaining customers within an even more competitive landscape. However, we know that brand loyalty is waning for most. According to a recent report, 27% of UK adults feel no loyalty to any brand. Worryingly, it has become increasingly difficult to garner initial loyalty in the first instance, with nearly 40% of global shoppers agreeing that they’d need to buy from a brand five or more times before they would consider themselves loyal — an 11% increase YoY.
As a result, it is important that brands do not confuse habitual purchasing with perceived loyalty, which will be especially pertinent during a time where consumers will be more conservative with their spending. To obtain and develop loyalty, consumers need to feel valued and understood, meaning their interaction with the brand needs to extend beyond the transaction process. 85% of respondents overwhelmingly agree that they’re more inclined to buy from a brand whose values align with their own (rising to 90% for Gen Z). Therefore, the onus is now on brands to tap into and earn consumer’s emotional loyalty.
In a time where consumers are more vigilant when it comes to their data privacy, striking the balance will be key. A recent report suggested that 68% are willing to share information with brands they love in exchange for more personalized loyalty experiences and rewards, but will abandon brands that ‘over-personalise’. Loyalty programs, incentives and exclusive offers could be key to unlocking that personal experience that shopper’s crave, resulting in the holy grail of customer retention (87% of Brits say that a loyalty program influences them to buy again).
The secret to building true emotional loyalty requires crafting journeys, remaining principled, and creating experiences – moving beyond the data and understanding consumers as individuals. Now more than ever, it’s important for brands to recognise the difference and invest in the moments that matter, keeping shopper’s coming back for more!
Source: The QT Feb 2022, Canvas8, State of Brand Loyalty survey