Rising inflation is a concern for retailers across the globe. Customers are becoming more vigilant about spending money. Equally, retailers are faced with increased cost prices.
How can brands capture customer loyalty at this turbulent time?
Here’s what retailers can do to build loyal relationships during the cost of living crisis:
Start with empathy
One of the most vital skills for a business to have in this current climate is empathy. Customers are now being forced to make do with less. You must consider the daily challenges this brings and the emotions that come with it. Take a moment to think about how you can truly be there for your customers during this time. The relationships that you build now will benefit you in the coming years.
Empathy should be the starting point for any marketing campaigns and sales strategies you deliver during this time. Try not to make assumptions about how your customers are feeling, and instead focus on what you can do as a business to make your customers’ experience easier, smoother, and more valuable.
Offer more value
How do you compete without lowering prices? Rewards. Retail customer loyalty programs can help with both retention and new customer acquisition by enticing customers to purchase from you over your competitor. Give customers an extra reason to choose you by offering rewards such as bonus ‘points’ when they buy a particular product or range. Create your own rules and remember to give rewards that are exciting and useful.
It’s important to reward beyond transactions, too. Some customers may want to spend with you, but don’t have as much disposable income as before. How do you keep these groups engaged with your brand? Reward them for any kind of activity. For example, offer points to customers that write product reviews or share your content on social media. This will help all of your customer feel appreciated.
How do you know what kind of rewards to offer each customer? You need a bank of data…
Collect data for the now and future
Building relationships with customers takes time and data. Collecting insightful customer information is vital for short and long-term business success. For now, consider what customer data you currently have…Are you collecting enough data? Are you collecting data that you can derive insights from? Are you using data and insights to drive loyalty? Retail loyalty programs are a quick and easy way to collect customer data. Businesses often give free points or rewards to every customer that signs up for their retail loyalty program or app. Loyalty software collects information about customers – such as demographics and shopping habits – to build a bank of data.
Businesses with an insightful customer database will know how, when and what to target their customers with. Loyalty software can also use AI and machine learning to predict customer activity, helping you make smarter decisions. These insights mean that retailers with customer loyalty programs will be best prepared when customers are ready to spend more.
Connect with the digital world to improve customer experience
Digital transformation is happening in every industry at a faster rate than ever before. The retail sector in particular is pioneering some of the most innovative automation technologies like the AmazonGo stores. With customer preferences moving towards a world where everything is fast and easy, Amazon launched an autonomous store technology where customers can walk out without going through a checkout. AmazonGo combines advanced machine learning and AI to ensure customers never have to wait in line. Shoppers scan a QR code via an app to enter and leave with their basket. Items are automatically registered to a virtual card, and the ‘just walk out technology’ adds up the basket total and charges to a customer’s Amazon account. “No Lines. No Checkout. No, seriously.”
This example shows how technology can create a seamless customer experience by connecting online and offline channels across the buying journey. Digital transformation is improving the customer experience in the loyalty space, too. Data capture methods such as cardlinking offer customers a frictionless way to earn rewards. Personalised offers and rewards can be made more enticing and more accurate than ever using detailed analytics updated in real-time.
Create emotional connection
Relationships are built when brands are able to create emotional connections. One way to establish an emotional connection is through personalisation. According to Accenture, “81% of consumers want brands to get to know them” by understanding their wants and needs. Firstly, retailers should personalise communications and marketing campaigns. Personalised marketing engages consumers as individuals – “This makes them feel like brands are tuned into their unique preferences, which in turn increases emotional loyalty by establishing a relationship of trust and appreciation”. Personalisation should apply to rewards, too.
M&S does this particularly well with its Sparks loyalty scheme. Their program allows customers to receive rewards for non-transaction-based activities, such as recycling clothes and writing reviews. Spark’s retail loyalty program is highly-personalised, showing customers how “the more you collect, the more [M&S] will get to know you, and the more [M&S] can treat you – to offers, events, and other exclusives you’ll love”. The retailer also donates to their customers’ preferred charity every time they shop, “because what matters to you matters to us”.
Conclusion
The cost of living crisis is the wake-up call retailers need to shift their perspective and approach. Brands must find new ways to meet the needs of consumers during this time. If you follow the above advice, you will create a loyal customer base that will stay with you throughout financial turbulence.
