Commentary

Trust, Loyalty, and Quality Carry Retailing

InMoment surveyed 1,300 consumers in the United States to understand the state of trust and loyalty, as well as customer perception about retailers’ attempts to offer more experiences versus simple transactions. Data has been cleansed and validated. 

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In the age of what McKinsey & Co. calls the “experience economy,” retailers are faced with a challenge: They must innovate the products and services they offer, while also creating and maintaining a customer experience that will keep customers both trusting and loyal in the face of endless options. 

A lofty goal, says the report, and many retailers and brands have stepped up their game by ironing out the seams between online and in-person, listening more and more transparently, and transforming brick-and-mortar locations into experiential environments versus simple transaction points. In addition to these massive changes, brands are also competing in a space in which consumer privacy and trust is more valuable than ever. 

Amidst these new rules and fundamentally different expectations has risen a more empowered customer, says the report, one who has brands asking if ideals like trust and loyalty still exist between individuals and institutions, or whether we’ve entered a new world where infinite choice and outsized bargaining power have turned these important commercial tenants into relics. 

InMoment surveyed 1,300 U.S. consumers to understand the state of trust and loyalty, as well as customer perception about retailers’ attemps to offer more experiences versus simple transactions. The research produced a treasure trove of insight; here are the three major themes that surfaced: 

  • Trust and mistrust are earned. Consumers are clear regarding what brands must do to gain their trust, and equally as clear as to what they will give in return. 88% of respondents agree trust is “extremely important” when deciding where to shop, with 40% reporting they “strongly agree”. 
  • Loyalty is alive, and complicated. Today’s consumers are clearly loyal. However, how modern loyalty manifests itself may surprise brands. Despite concerns regarding “ever increasing expectations,” customers care less about being wowed than they do about retailers keeping their basic promises. 
  • Consumers crave experiences, not just purchases. Even simple transactions can be meaningful, but consumers appreciate when brands make small efforts to make a transaction feel like more than a generic exchange. 

83% of consumers consider themselves about the same or more loyal to brands than their parents. And nearly 30% of Millennials reported being more loyal than their parents, the highest percentage among all demographics. When researchers asked those who consider themselves less loyal than their parents why they felt this was the case, the top answer was that they have more choices 54%, with 37% saying it was because they have more information. 

For consumers who felt they were more loyal than mom and dad, 42% said it’s due to doing more research and having first-hand experience, with 35% saying its because they have a larger variety of choices. 

The strong message to retailers is that consumers have choices, do their homework, and are more discerning. 

Researchers asked consumers to classify themselves as one of three loyalty types. Here’s how they ranked them: 

  • SHARE THE LOVE. 60% of consumers said that while they aren’t singularly committed, they are faithful to a “select” number of brands. 
  • PLAY THE FIELD. 23% of consumers say they are not loyal to specific retailers or products. They tend to make purchasing decisions in the moment depending on new products/services, price, offers/sales, recommendations, etc. 
  • MONOGAMISTS. Just 17% of consumers classified themselves as “fiercely loyal” to a handful of brands, typically one per category. This rare breed tends to shop at only one only grocery store, purchase one brand of automobile or clothing, etc. 

The 2018 Retail CX Trends study asked consumers whether a “recent, enjoyable” shopping experience occurred at a physical store, digitally, or through a combination of physical and digital. 

  • 53% said it was in a store. The research also showed the younger the consumer, the more likely they are to have enjoyable retail experiences in the digital realm alone, and as a hybrid blend of digital-physical. Brick-and- mortar stores will continue to be essential touchpoints, but retailers must address the need to elevate and embed digital elements if they hope to be relevant to their next-gen customers. 
  • The researchers wanted to know what elements of a retail interaction elevate a mere purchase to an experience. The two top answers were at the opposite ends of the intensity spectrum. Coming in at No. 2 was Personalization, says the report. 30% of respondentssaid personalized treatment in stores is what elevates a mere purchase to an “experience.” Part of what elevates a brand experience is making customers feel special. 
  • Product qualityis the top-ranked response At first read, this may feel anticlimactic. After all, quality doesn’t have the same sparkle as some of the other options, like multisensory elements like smell, taste, touch, or access to experts. What this rather mundane-sounding selection may indicate is consumers’ focus on the experience beyond the initial purchase experience, the enduring impression that a good, quality take-away creates long after the transaction. 

Trust and loyalty, like every other human value, are complex. Today’s retail customers have new expectations that can be difficult for brands to match. At the same time, the findings in this study were very clear: Today’s consumers will be very loyal when retailers deliver the meaningful value they promise, and in a way consumers can count on. 

 

 

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