This is based on the joint study conducted by a first-party customer information specialist, Edit, and digital transformation firm Kin + Carta, which exposed the negative impact of the pandemic on customers’ loyalty.
The report, titled “The Loyalty Paradox’ shows that loyalty to brands became obsolete in 2021.
Twenty-two thousand participants split equally among the UK 22,000 respondents, evenly divided between the UK and USA, were given several-choice questions about the personalization of loyalty, loyalty, and customer experience across a wide range of industries.
E-commerce was an inferior performer, and only 6% of shoppers said they were loyal to brands in the same sector. In the lowest-scoring segment on the internet, e-commerce brand loyalty was lower than the level of finance (9 percent) and offline retailing – food and beverages (21.5 percent).
Purchases regularly
Rob McGowan, joint managing director at Edit, remarks: “These results suggest that while the e-commerce sector boomed during the pandemic, brands would be wise not to confuse habitual purchasing with perceived loyalty.”
Beyond e-commerce, the customers’ loyalty to financial products increased as we grew older. Perhaps unsurprisingly, it is the case for those with an income of at least PS75,000 and more than 20% of those in this category claiming to be loyal to the brands in the sector.
In a digital-first journey for customers, Rewards are the most likely to influence the sharing of personal information across different demographics. Most survey respondents said “a discount code or other incentive’ could convince customers to join the brand’s communications.
A quarter (25 percent) would prefer exclusive products or the first chance to buy. Gen Z consumers saw “exclusivity” as particularly attractive, and nearly three-quarters (30 percent) were keen on a first chance to buy.
Although rewards were viewed as a fair tradeoff for sharing personal data, more practical considerations remain the primary consideration for younger audience members. Customer service and operational communications overcame rewards as a return factor in the younger generation. Thirty-four percent of Gen Z respondents and 32 percent of Millennials stated that they would be dissuaded from buying another product if they cannot reach the customer service department using their preference method’.
McGowan added: “Brands cannot rely on loyalty any longer. Brand loyalty through emotional connections has diminished to be replaced with habitual bonds based on actual and associated experiences with retailers and brands.
Therefore, ” Brands must make sure that they consider the individual customer and how they interact with the company to understand their behavior better and encourage them to make purchases regularly. Therefore, brands must look at the consumer journey in general and identify opportunities to improve their offerings using data. If you do it correctly, you can keep more customers in the long run and also attract fresh ones.”
Karl Hampson, CTO data & AI at Kin+Carta, stated: “Our research shows that brands should not misconstrue the purchase multiple times in “loyalty.” Instead, they must balance the frequency of transactions with how engaged customers are throughout all interactions.
“Data is the key element to this overall goal and, equally, companies must invest in the tools to know the person who is the source of data. This means making data accessible, allowing insights to discover and improve your customer experience by bringing your data teams closer so that an understanding and strategy that is shared is possible.”