Against a backdrop of unprecedented prices rises on the high-street, shoppers have significantly cut back on their spending, turning to alternative brands; especially brands that are candid in their care for consumers during an economic crisis.
British consumers are feeling the full effects of the cost of living crisis, with prices soaring at their fastest rate for 40 years.
The rate of inflation hit 9.1% earlier this May, with the increasing cost of food, energy bills and fuel pushing household finances to breaking point.
Online shopping has also continued to drop since the surge in inflation, with total sales reportedly falling by 9%. Consumers have seemingly cut back on big ticket items like furniture and home appliances, instead opting for affordable brands.
How can brands help consumers navigate the crisis and maintain a steady business relationship?
Value, Empathy & Understanding.
How can retailers compete if lowering prices isn’t financially viable? Rewards. Retail customer loyalty programs help with both retention and customer acquisition by enticing customers to purchase with them rather than any competitor. Give customers an incentive to choose you by offering rewards, such as bonus ‘points’ for example, when they buy a particular product or range. Give rewards that are exciting, diverse and ultimately practical.
For brands struggling to retain a customer base, it’s imperative they show empathy and understanding for their situation.
Where possible, then brands should always offer fair prices on products along with helpful promotions and discounts – customers want rewards in return for their loyalty.
Consumers will only part with their money online and instore with brands they wholeheartedly trust. Those that prioritise a comprehensive customer experience, invest in loyalty programs, and provide above-and-beyond exemplary customer service.
Considering the overall maturity of customer-centricity and loyalty marketing, it is encouraging to see many brands taking steps to create formal approaches to engaging and rewarding their customers.
Why offering a Loyalty & Rewards Scheme is essential to your consumers
Loyalty programs and discounts are extremely popular marketing methods that reward shoppers for purchasing products from a particular store. Retailers are conjuring new initiatives to build their loyalty programs and inspire customers to return.
With the help of evolving new technology, loyalty programs are far more intricate and rewarding for both consumer and retailer. Consumers desire choice in their loyalty programs rewards, something that has long been dictated by the brand itself. However, with the collection of POS data, retailers are able to effectively target and market additional products/services to their customers. This provides consumers with rewards that are more aligned with their desires or needs.
Discounts Dominate. With more than $15 billion in rebates being issued in an average year in the US alone, it’s evident that discounts are an integral part of the loyalty and marketing strategy for retailers. Just as the consumer wants choice in rewards they receive, they also want to choose how to redeem their points and in what fashion they're paid out.
Checking in with shoppers post-sale can lead to customer retention and boost customer acquisition
It’s also important to offer rewards to customers following a transaction. Some customers may want to spend with you, but in this economic climate, have far less disposable income. Try keeping customer groups engaged with your brand by rewarding them via interaction, say by offering points to those who write product reviews or share your social media.
Getting your rewards right should be the priority for retailers' loyalty programmes. Understand what your loyalists and prospective customers really want and then start delivering tailored rewards to each individual; personalisation is key within a customer loyalty scheme.
Customers crave and expect an authentic and personalised customer experience. They need to feel like a VIP across each POS or interactive experience.
Data-driven insights are crucial in order to understand which rewards appeal most to your high-value customers.
The resurgence of customer loyalty
We are witnessing a resurgence of customer loyalty as brands recognise the value they deliver to customers and their enterprise (fuelled by economic disaster). As a new wave of programs step into the market, the formats we're used to seeing will start to change. The loyalty market is poised for continued growth, as brands commitment for loyalty program expansion is centred on adding a plethora of new features such as gamification, value-based rewards, family household help, multi-brand offers and UX rewards.
The most popular approach in B2C and B2B loyalty will be using one program structure to drive traffic and revenue to multiple brands - what's been coined as an “umbrella” approach, where two or more companies join forces to build an end-to-end ecosystem allowing customers to earn and redeem across all the participating brands.
Employing strategic partnerships, or 'co-branding', to create a stronger loyalty offering has surfaced in the market over the post-pandemic years - such as Dicks Sporting Goods and Nike, and food retailer Morrison's and Amazon.