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One size fits nobody – the new approach to customer loyalty

By Tom Hall, Head of Analytics & Technology, IRI UK

The words ‘it’s been emotional’ have never been more apt in recent times. It has certainly been a period of high emotion for both customers and retailers.  

This means that everything we thought we knew about loyalty – both for retailers and brands – needs to be reconsidered as we look at how this unprecedented situation has forced significant changes in shopper behaviour. Many of these will continue for months to come as consumers come to terms with the next normal – queues, social distancing, in-store safety and so on.

Lockdown forced people to shop in different ways and via unfamiliar channels. Instead of cherry picking from across multiple retailers and brands based on personal preference, most moved to larger, less frequent trips visiting just one or two stores.

Convenience benefitted as footfall increased along with bigger basket missions as shoppers moved from ‘top up’ to ‘stock up’. Greater numbers have now turned to online shopping and retailers have been forced to respond to demand by increasing capacity for delivery and click and collect.

As lockdown eases and we continue to adjust to the situation, the pressure is on retailers and brand owners to maintain an emotional connection with shoppers and make customer-centric decisions. Peoples circumstances are very different and consumer responses are individual, more than ever, there is no one size fits all approach.  With this in mind, it is logical to expect that what we thought was true about our customers will now no longer be the case or, at the very least, is now in need of a review.

Communicating with shoppers, making sure they understand how retailers are working for the safety and benefit of both staff and customers is a vital tool to gain loyalty.  We can look at pricing as an example. Many shoppers will have noticed that their grocery bills have increased. While we might have a quiet moan to ourselves about how retailers are taking advantage of the situation, the truth is that this is not due to an increase in prices, but the removal of most on-shelf promotions (down 19.5% in the 12 week period to 30.05.20 according to IRI figures) to manage availability. Most shoppers are not aware of this; if they were, they perhaps would be more understanding.   Greater transparency from retailers and brands can help create trust and drive a deeper connection with consumers. But it’s more complex than just that.

Understanding and measuring shopper behaviour is essential but the real advantage comes from being able to predict it. 
Being able to anticipate shopper behaviour to the extent that you can present customers with offers that are affordable and meet their needs at precisely the right time will become even more important.

The bright spot on the horizon is that, as consumers have been forced into shopping for everything in one store, it is now easier to take a full basket view and understand better than ever before what sort of shopper they are. Retailers will have to work harder to understand customers’ needs and will need to engage on an even more personal level than in the pre-COVID era, but they now have better information to help them.

Times ahead are going to be tough. Depressing predictions about a ‘historic recession’ are already coming to bear as we start to see store closures, job losses and a fall in GDP levels across Europe. Financial uncertainty will continue to impact shopping behaviour and retailers need to be armed with the right information to make sure they have up to date understanding of customers and ensure their marketing and communications are relevant. Segmentation and personalisation are more important now than ever

IRI’s new paper ‘Changing the approach to brand and retailer loyalty’ in the context of COVID-19 sheds light on what could be the retail industry’s new approach to driving strong shopper loyalty using the 6 levers of behavioural marketing.  Available to download here: https://www.iriworldwide.com/en-GB/insights/publications/changing-the-approach-to-brand-and-retailer-loyalty

 

IRI is also running a webinar for retail and manufacturer clients on Thursday 16th July 2-2.30pm (UK time). Register here


 
 
 
 
 
 
 
 

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