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Established 1996
Saturday 30 May 2020


Two thirds of retailers can’t identify loyal customers

Written by Peter Walker

The majority of retailers do not know who their most loyal customers are and cannot therefore know if their loyalty strategies are inspiring prolonged customer advocacy, according to new research.

A study conducted by Forrester Consulting on behalf of Collinson among 635 retail decision makers in the UK, North America, Hong Kong, China, India, UAE, Singapore, Brazil, Australia, France, Japan, Korea, Indonesia, Saudi Arabia, Mexico, South Africa found that 65 per cent are not actively leveraging their loyalty programmes to know which customers are in fact brand advocates.

Just over half of the respondents at organisations with revenues exceeding $300 million track and analyse what happens when loyal customers interact with their brand, in order to improve the overall loyalty experience.

A third of brands admitted that their loyalty programme does not cohesively span multiple functions in the business and it is not a top strategic initiative with board-level support.

Separate research conducted by Censuswide for Collinson, investigating UK consumers’ experiences of loyalty programmes from retailers they are loyal to, found corroborating evidence that loyalty schemes are not a top priority for brands – with just over a third saying they were offered to create a customer profile when purchasing online, rather than check out as a guest.

A further third said they are typically invited to join a loyalty programme to benefit from future offers or rewards when making a purchase.

Forrester’s research for Collinson confirms this, as nearly a quarter of retailers stated outright that they do not have a balanced benefits package that rewards, recognises or engages their customers.

In August, Salesforce surveyed 6,000 consumers across six countries, finding that 64 per cent of shoppers feel retailers do not understand them, suggesting there is room for improvement with personalisation and loyalty initiatives.

Steve Grout, director of loyalty at Collinson, commented: “The retail landscape has shifted dramatically in recent years and it is simply not enough anymore to offer products that, by their own merit, keep customers coming back.

“Worryingly, however, it seems many brands haven’t been heeding the warning of the High Street’s various struggling retailers,” he added.

In terms of future investment in loyalty programmes, three-quarters of retail decision makers said they intend to increase spending on new loyalty benefits and rewards in the next 12 months, with 42 per cent of that group pledging an increase of more than five per cent on the year prior.

Grout concluded: “The jury is out on whether brands’ investments in loyalty initiatives will have their intended impact - one thing is for sure though - if they fail to listen to customers and refresh their programmes irrespective of the data available, they will struggle to resonate and succeed with deservedly demanding customers in this fiercely competitive modern retail climate.”


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