Report: Retailers out of sync with customer loyalty expectations

Retailers are out of sync with customer loyalty, according to a study by Oracle. Titled: “Retail 2018: The Loyalty Divide,” the study audited 13,000 global consumers across retail and hospitality in five key markets, including the UK, France Germany, India, USA, Brazil, Australia and China.

The findings clearly show retailers are out of touch with consumers who in 2018 demand more personalized experiences and who discover brands and affirm purchasing decisions through social influencers.

Consumers want personalised engagement

“In our primary research, we have uncovered a disparity between consumer and retailer expectations. Retailers put significant focus on transactional activity metrics and less focus on emerging behavioral expressions of loyalty. We found that retailers are overly confident in their ability to deliver relevant incentives and consumers are demanding more personalized engagement,” said Mike Webster, senior vice president and general manager, Oracle Retail and Hospitality.

“Retailers need to take a critical eye at the culture of shoppers that only engage based on convenience and price. Social influence brings an additional dynamic for retailers to navigate the loyalty paradigm as they reward brand advocacy and feed enthusiasts content to affirm their purchases.”

Shoppers in all age groups and demographics are selective when it comes to signing up for loyalty programmes, having their data used by brands they do not yet trust. The divide is apparent with Oracle’s findings showing 32 percent of consumers believe a brand’s offer is relevant, compared to 58 percent of retailers believe their offers are relevant.

The millenials and younger generation are the demographic with the highest propensity to join loyalty programmers, where as those 55+ are the most discerning, signing up only for programmers they deem relevant.

Social presence and influence advocacy is key

The study further highlights the importance of social media for consumers to consider and discover a new brand. Key findings include 53 percent of consumers are likely to research brands on social media before buying; 37 percent of consumers agree that retailers used and recommended by social media influencers are more trustworthy than those recommended by celebrities; yet 28 percent of retailers will only take into account measures of loyalty based on activities such as loyalty card membership or transaction frequency.

Unsolicited and irrelevant marketing is still a bugbear for many consumers, who would otherwise be much more responsive to personalised offers and experiences tailored to their interests.

According to a report by McKinsey last October titled: “What shoppers really want from personalised marketing,” their research showed customers said they valued relevant recommendations, but not reminders of products they have already bought or previously searched for. Customers also prefer to receive personalised marketing messages when they are in shopping mode. That means retail marketers have to use customer data in such a way to know their online behaviour, shopping and browsing patterns and digital habits. According to Oracle, 66 percent of consumers note personalized offers based on purchase history as appealing.

“Retailers are heavily invested. The future of loyalty will be a balancing act between consumers desire for more anonymity, or at least direct control of their data, and an expectation for meaningful personalization that is targeted and timely,” said Webster.

Key is that both consumers and retailers recognize that technology has an important role in driving connection and convenience in loyalty programs. Retailers, however, need to walk a fine line between enabling deeper connections without being invasive.

Credits: Article source: Oracle report “Retail 2018: The Loyalty Divide”; image: Various loyalty cards, source Wikipedia