Consumers ‘willing to pay for better loyalty schemes’

shoppersRetail brand owners have finally woken up to the need to keep hold of their customers during the coronavirus outbreak, with nearly nine out of ten (88%) businesses saying they have launched or revamped their customer loyalty programmes during the pandemic.

That is one of the key findings of a new report from GetFeedback entitled: “Retail Reality: What your customer actually want (and what retailers are already getting right”), which also shows that consumers are willing to pay to join a scheme to receive better benefits.

As the study confirms, due to evolving consumer habits and changes to spending, customer loyalty programmes have became a crucial factor in retaining customers during the pandemic.

And when it comes to what features to include in a customer loyalty scheme, it seems consumers and retailers are closely aligned on their priorities.

“Special pricing or discounts” came in at the top spot followed by “free shipping/delivery” for both consumers, when asked what would interest them in a loyalty scheme, and retailers, when asked what their programme includes.

However, with special pricing and other monetary perks at the top of the list of consumers’ preferred loyalty features, the report warns that customers could have more loyalty to the discount rather than the brand or business.

It states: “On their own, discounts aren’t enough to create loyalty. If you offer similar brands and goods as your competitors, your customers may buy from whoever has the biggest sale or lowest price – unless they have an emotional connection to your brand that’s been built over time through consistent customer service and excellent value.”

Even so, it goes on to highlight that, with speedy service and delivery worth a lot to consumers, over a third said they would actually be willing to pay for a loyalty programme that offered faster shipping or customer service.

The report added: “Charging a monthly or annual fee for your loyalty programme can help you recoup some of the costs of running the scheme, and may even encourage customers to turn to your business more often to get the most out of their investment.”

Elsewhere, the report reveals that 84% of consumers say they are likely to choose a retailer based on convenience or ease of doing business.

The study states: “There are many elements that make a shopping experience convenient, from location to amount of difficulty to complete a purchase, but the key to convenience is reducing the time and effort required to do business with you.

“The opposite of convenience is friction—any roadblock that prevents a buyer from successfully completing a purchase. With such high expectations for convenience today, your success depends on removing points of friction and making the shopping experience as easy and seamless as possible.”

Meanwhile, perhaps unsurprisingly, reports that Covid will kill off the high street have also been dismissed, with bricks and mortar locations continuing to play an important role.

The study found an omnichannel approach is still the most desirable path forward; almost half of consumers say they prefer the option to shop with a retailer online and in-store (compared to just 28% who prefer shopping exclusively in store and 23% who prefer online-only).

Once again, it is consumers’ love of a bargain which is driving the sector. It’s clear that online shopping isn’t slowing down. Consumers say “finding deals and promotions” is the number one area they would like to see improved in the online shopping experience (46%), followed by “comparing prices or reviews” (42%), and “easier site navigation” (32%).

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