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“Loyalty is huge and can drive an enormous amount of growth for a brand.” — Andrea Leigh, Founder and CEO, Allume Group
Stanley Cup. Barbie. Apple.
What do all these brands have in common? Fiercely loyal customers.
These companies breathe rarefied air. Achieving customer loyalty is the Holy Grail, but it is still elusive for so many brands. Companies that unlock it often have a viable pathway to long-term growth and profitability. Those that don’t must continually acquire new customers, mostly compete on price, and struggle to grow their market share.
Andrea Leigh, founder and CEO of Allume Group, an ecommerce education consultancy, says shopper loyalty has become more important than ever for brands to maintain their competitive advantage.
Leigh joined a recent episode of the “Unpacking the Digital Shelf” podcast, “Loyalty is Everyone’s Job,” to share what Allume’s research uncovered about the evolving nature of shopper loyalty and the three levers brands can pull to fully unlock it.
Leigh says several factors are driving a renewed focus on shopper loyalty.
First, ecommerce teams are being asked to do more with less because some of the digital commerce growth their companies experienced during and immediately after the pandemic has slowed. As a result, companies are cutting back, reducing their staff and the number of agencies they work with to optimize their costs.
It’s always been cheaper to keep an existing customer than to acquire a new one, so brands are now turning to shopper loyalty to drive more growth.
“The idea of shopper loyalty is becoming a part of everyone's jobs,” Leigh says.
But loyalty can mean different things. In this context, Leigh frames loyalty as driving repeat purchases through coupons, subscriptions, shopper marketing, memberships, and community. She says it’s now critical for brands to focus less on conversion and more on connection to retain their customers.
“Digital leaders have been really singularly focused on transaction and conversion online,” Leigh says. “Taking a step back to really think about that shopper and how do we develop a relationship with them and how do we drive brand loyalty, that's been top of mind with a lot of our clients.”
Leigh says brands can focus on three key areas to drive loyalty. These areas also align with three core needs for today’s consumers:
This principle of shopper loyalty is about mastering the basics.
According to Allume’s research, 92% of shoppers say their favorite brand provides a consistent experience regardless of where they interact with it, which further highlights the importance of delivering an omnichannel experience.
When it comes to making it easy, Leigh says shoppers prioritize availability and quality over delivery speed. However, Allume found that 88% of U.S. shoppers report online retailers failed to meet their availability and price expectations at least one to three times in the last year alone.
Ultimately, Leigh says, brands need to meet shoppers wherever they are, understand their unique needs and preferences, and interact with them in ways that reflect this.
“It's not about fancy loyalty programs. Shoppers cite really foundational commerce elements when they talk about their favorite brand or their favorite experiences,” she says.
Brands increasingly try to deliver personalized experiences. Consumers are open to this as long as these connections feel authentic, according to Allume’s research.
For example, 85% of shoppers say their favorite brand treats them like an individual, and 88% say their favorite brand uses their data in ways that make them comfortable.
“Those are the two, almost contradictory, needs that shoppers are telling us about,” Leigh says.
She adds that “far-reaching personalization can be a trust buster,” meaning brands have to create connection without it feeling creepy — or even worse, irrelevant — to consumers.
Over half of global shoppers say they’ve received irrelevant content, ads, or offers because of indirect targeting tools that capture their information unwillingly and then use their data to target them across channels.
“This is really just about fostering an emotional connection and showing the shopper that you care.” — Andrea Leigh, Founder and CEO, Allume Group
“This isn't about having the most sophisticated artificial intelligence (AI) to communicate with shoppers or to create the creative. I think this can sound hard, especially for really big brands, but it isn't. It's really just about communication, “ Leigh says.
More than eight in 10 shoppers are more likely to stay with a brand, spend more with a brand, and advocate for a brand when they feel appreciated. So, brands that consistently deliver personalized experiences and are transparent with customers about how they’re using their data will cultivate more shopper loyalty.
Unsurprisingly, consumers want to be rewarded for their loyalty.
Nearly 90% of shoppers say their favorite brand rewards them for their loyalty. However, Allume found that rewards extend beyond loyalty programs, points, and discounts. A third of shoppers find value in receiving exclusive access to products or services, and 25% of them value personalized product or service suggestions.
Leigh says much of the loyalty-building brands do today is very transactional and discount-driven, “but I think that it's really best if there's an opportunity to offer more than merely financial incentives.”
Lululemon is a great example of how brands can move beyond a transactional relationship with customers. The company offers its customers early access to new products and free yoga and Peloton classes.
The athletic wear brand also hosts several membership events throughout the year and offers free hemming for purchased clothing. What’s even better is that customers don’t even need to be enrolled in a loyalty program to get these perks.
“I like that it's a pretty multifaceted program that focuses on more than just discounts. It's about a whole experience and a whole ecosystem,” Leigh says.
As Lululemon shows, achieving shopper loyalty requires a thoughtful approach from brands, one that involves treating each customer as an individual, mindfully using their data to drive value, and offering them a compelling experience — rather than just discounts. When companies focus on each of these things, they’ll not only drive shopper loyalty, they’ll increase brand value.
“You get what you put into this,” Leigh says.
To hear more of Leigh’s insights on shopper loyalty, listen to the full episode.
