The global pandemic has turned the world on its head. For retailers, some of the most significant changes have been to consumer behaviour – this includes how people buy, what they buy, and where they buy it.
To help retailers prioritise their efforts in this new era, Periscope by McKinsey surveyed more than 2,500 consumers in the US, the UK, France, and Germany to understand how consumer behaviour is currently and has already changed. Compiled both before and during the lockdown in each country, it discovered significant trend shifts, including a move towards online and omnichannel, a downturn in loyalty, and convenience redefined with technology.
These results revealed a major red flag since a downturn in loyalty poses a tremendous threat to the future of retail. So, what can we do about it? Let’s explore.
Why loyalty has dropped in the UK
McKinsey found that retailers in the UK were particularly vulnerable to the drop in consumer loyalty as a whopping 44% of consumers in this region tried new brands or made purchases with a new retailer between March and June this year.
The reason for this loss of loyalty is ultimately because consumer priorities changed. Suddenly, factors like competitive pricing and stock levels became of greater importance, combined with how brands had responded to the pandemic.
For example, shoppers were particularly drawn to brands or retailers that supported their employees during the pandemic, such as by increasing their wages, giving extra sick leave, or paying employees for lost wages. One survey by Braze found that 94% of UK shoppers would walk away from purchasing with a brand if they don’t agree with their response to COVID-19.
Evidently and crucially, brands must build real engagement with their customers and offer real value, especially in a digital environment in which brands can no longer rely on passers-by and an attractive shop front to draw in potential customers.
An online experience that’s worth sticking around for
Building loyalty online requires a frictionless payment experience, as well as delivering consistently on the attributes consumers care most about, including free and fast deliveries and returns, clear and detailed product descriptions and images, and quick page loading.
One great way for retailers to provide extra value to consumers is by offering interest free credit as a payment option. With DivideBuy at the checkout, not only can retailers enable their customers to spread the cost of a purchase over several months, but customers can find out their credit eligibility via a soft search check that doesn’t damage their credit score.
Offering Point of Sale (POS) finance also encourages consumers to purchase more items or even change to a bigger ticket item. Best of all, research shows that conversion rates, upselling, and customer loyalty all increase when the offer of interest free credit is available.
These small and easy to implement changes will help you foster loyalty with customers old and new, giving them every reason to shop with you time and time again.
For more information about building customer loyalty through POS finance, visit our retailer page.