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Retailers struggling to retain today's customers: Report

01
Aug '19
Pic: Klarna
Pic: Klarna
Retailers are struggling to retain their customers today who increasingly have zero tolerance for poor retail experience, says a new research conducted by Klarna across 2,000 UK consumers and over 250 retail decision makers. Consumers want to align themselves with brands who can offer them a deeper connection and understand how they want to shop.

According to the report, 40 per cent of shoppers say just 1 bad experience would stop them returning to a brand. A third (32 per cent) of shoppers say that shopping isn’t as fun as it used to be, with 36 per cent feeling that what shoppers today have gained in convenience, they have lost in experience.

The new research gives retailers some of the insights they need to help win the loyalty stakes and deliver the standout shopping experience demanded by consumers. It reveals that whilst the traditional drivers of loyalty remain important, it is no longer enough to only deliver value for money, quality products and a good online UX.

Shoppers today want more – craving things like brand values they can align with, human engagement and flexible payment options. This is especially true of millennial and Gen Z shoppers who care less about value for money, and more about brand image and flexible payments.

Retailers are recognising this shift and starting to evolve the way they think about loyalty. 41 per cent of retailers agree that loyalty is no longer solely driven by rewards and 76 per cent say they have to work harder than ever to retain customers. Many (33 per cent) are struggling to keep pace with changing consumer expectations around experience and are being held back by outdated tech (33 per cent) and a short-term focus on sales (30 per cent).

Forward-thinking retailers are already starting to invest in these ‘newer’ elements of experience. The top areas for investment over the next 12 months are a smooth online UX (39 per cent), additional payment options (38 per cent), a curated experience (37 per cent) and brand content (34 per cent).     

“Loyalty is no longer a ‘points’ programme. It’s clear that consumers want to align themselves with brands who can offer them a deeper connection and understand how they want to shop. Retailers need to be investing in the right drivers of loyalty for their customers – whether that’s flexible payment options that fit with their lifestyle or curated experiences that put the fun back into shopping. As consumer expectations continue to grow and the role of experience becomes increasingly important, getting this right will be vital to success in a competitive retail market,” said Luke Griffiths, managing director at Klarna UK.

“Shopper confidence appears to be in a suppressed state and many retailers are under pressure to enhance the customer experience they offer to keep ahead in a tough environment. The problem is that ‘customer experience’ is a term that can technically cover every aspect of a retailer’s proposition. Identifying where to focus resource is a challenge. This research shows that understanding the drivers of loyalty that will work for a specific retailer is important for keeping ahead today,” said Andy Mulcahy, strategy & insight director at IMRG.

“We’re constantly evolving what we do to ensure we’re hitting the right drivers of loyalty for our customers. For example, being an online brand doesn’t mean only existing in the digital world and we know our customers want IRL experiences that allow them to feel truly connected to the brand. That’s why activations like beauty master classes with pop-up shopping help us create deeper loyalty and long-lasting brand advocates, said Holly Stewart, head of brand, Beauty Bay.

We’re also now seeing payments as crucial differentiator in the shopper experience, and we recently introduced Pay in 3 for customers to split payments into manageable chunks with no fees or interest. Our customers have loved this flexibility and its driving new customer acquisition, increasing loyalty amongst existing customers.”

Klarna is Europe’s leading payments provider and a newly-licensed bank, which wants to revolutionise the payment experience for shoppers and merchants alike. (PC)

Fibre2Fashion News Desk – India


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