What’s Behind Flickering Customer Loyalty? | Trace the trends
HIGHLIGHT – Items under their control – and many that aren’t – are the root of today’s customer retention issues for retailers, according to a recent landmark report on the subject.
Asked about the most significant issues related to loyalty, the 115 merchants interviewed for Retail TouchPoint Customer Loyalty and Personalization in 2022 report most often indicates the loss of customers due to stock-outs caused by supply chain issues (44%), followed closely by insufficient staff (41%), which is considered both a sub -product of the pandemic and the beginning of the Great Resignation.
Some other factors cited by retailers were related to more controllable issues including their digital offerings, and ranged from optimization issues for e-commerce and mobile sites to high e-commerce volumes negatively impacting service. customer.
Retailers also weighed in on challenges in stimulating repeat purchases, the main one being competition from low-cost competitors (43%). Concerns over lost sales on marketplaces such as Amazon were top of mind for 30% of respondents, while various data and technology issues such as uncentralized customer data, insufficient or outdated technology and incorrect customer data for retargeting were also raised.
The top five tools used by retailers to retain customers were shopping discounts, 73%; loyalty program points, 63%; in-store relationship building, 62%; free shipping, 57%; and free returns, 54%.
Despite the cited issues, the ability to convert new customers into repeat buyers has improved, as 13% of respondents said they were able to convert more than 50% this year compared to just 8% who did so in 2021. And the percentage of conversions at the low end has declined, with only 11% saying they have converted less than 10% of newly acquired customers into second buyers compared to 15% last year.
Loyalty programs also received a boost in 2022, with 21% of retailers surveyed saying more than 50% of their customers are members of the program. That’s up 133% from 2021’s 9%.
When it comes to means of engagement to acquire new customers, email outreach was the top vehicle, cited by 68%, followed by traditional media at 51%. Looking at newer channels, paid social messages and SMS were listed by around a third (31%) of respondents, with slightly more (37%) opting for paid online searches.
I’m Joanne Friedrick, Editor of the Home Furnishings Division. I started my career as a newspaper editor and then transitioned into a specialist journalist, covering a myriad of industries including pension funds, supermarkets, gourmet food and security systems, for n to name a few. More recently, I entered the home furnishings category as a contributor for HFN and Home Textiles Today before moving into research where I can now tell the stories behind the numbers for all HFD titles.