Key points
- Brand loyalty is a necessity when looking to drive purchases in an unstable retail economy
- Such loyalty requires values alignment and a multi-channel approach to connect with customers
- Careful channel customisation, tailored to engage a targeted demographic is key to ongoing engagement
The extent of external disruption in the retail sector continues to accelerate the need for change. The current landscape is undergoing unprecedented transformation, with every sector’s primary stakeholder groups – customers, suppliers, employees, and investors – considerably changing their behaviour and expectations. This convergence of challenges underscores the importance of retailers prioritising loyalty more than ever.
So how can brands work to build and retain customer loyalty at a critical juncture for the industry?
Build a relationship beyond a price point
In the ever-evolving landscape, retailers must harness alternative consumption drivers to foster brand loyalty such as values alignment or a standard of quality. For retailers, understanding their target audience, their distinctive preferences, and their relative competitive position in the marketplace is crucial for building a brand that is both memorable and lasting. Expanding on this concept, brands can identify multiple market segments and develop bespoke products or sub-brands to cater to each of them, as in the case of global clothing business ThreeByOne. ThreeByOne, founded by three friends from Melbourne and Stockholm with a shared passion for denim and retail, have developed three socially conscious denim brands, Neuw Denim, Rolla’s Jeans, and Abrand Jeans. Their dedication to originality and their unwavering stance against unethical practices paved the path for their jeans to achieve iconic status on a global scale, making them a quintessential Australian brand recognised worldwide. Co-founder and CEO Steve Little commented “those brands who are delivering an honestly sustainable product are standing out, separating the really committed from those who aren’t”.
Looking across our client base, the key attributes demonstrated by retailers who excel at building customer loyalty include a purpose-driven brand, alignment of their core values with their customer base, and an understanding that different channels are needed to reach their desired customer demographics effectively.
Consumers want to see purchases driving an impactful difference
Building on the need for customers to see how a brand’s purpose translates into a tangible difference, a retailer’s ability to authentically demonstrate their commitment requires a clear articulation of how a customer’s purchase contributes to a meaningful impact. This not only creates a personal connection with the customer but also instils trust, ultimately driving future purchases. The Environmental, Social and Governance (ESG) framework that a brand applies to their strategy and business operations serves little purpose if it is just left behind closed doors. “Consumers are now demanding high standards of sustainability and quality of employment from business” Steve commented. “In today’s world, a personalised experience is much more of a market entry necessity, rather than the stand-out quality of prior years; those without it, or at least one that doesn’t stand up to external scrutiny, risk falling behind their competitors and their purpose compromised”.
Broaden your consumer channels to expand your impact
Extending the alignment of a brand’s values with a specific customer demographic logically builds upon the foundation of the brand’s purpose. This alignment can be further enhanced by proximity to brands with similar or sympathetic values. To achieve this, a retailer’s strategic placement of product – both in terms of their physical store and in alignment with other brands – allows retailers to benefit from a collective association in the customer’s minds. ThreeByOne’s brands within David Jones locations is an excellent example of this concept in practice; two brands with similar customer positioning, sharing a physical space to take advantage of the multiplier effect. “We continue to open stores and make critical long-term investments in digital and technology that will keep our brands in position to exceed our customer’s expectations,” Steve confirmed.
Expanding on product placement, retailers now have more channels to connect with customers thanks to the interconnected, fast paced, and global online landscape. These channels have unique characteristics which necessitates careful channel customisation, tailored to engage a targeted demographic. The prevalence of data, and the valuable insights this data provides, empowers retailers to be agile with the products they promote. Commenting on the channel data ThreeByOne capture, Steve said, “we are now able to measure our footprint and customer response to our product lines in much more real time, allowing us to deliver a more agile customer experience.” Much like a personalised experience is a licence to operate, collecting data insights and acting upon them quickly is also now a market imperative.
Given the current economic climate and significant disruptions within the retail industry, now is a critical time for retailers to ensure they have the right strategy, underpinned by accurate business performance metrics with which to drive that strategy. In this context, prioritising customer loyalty stands out at as a formidable strategy to differentiate and grow in an increasingly competitive industry.
