Procurement · 15 August 2017

Online retailers urged to innovate as technology resets brand loyalty

A majority of respondents claimed their everyday apps were more sophisticated than online retail services
A majority of respondents claimed their everyday apps were more sophisticated than online retail services

Service and experience have overtaken reputation as the drivers of consumer brand loyalty, according to new research, giving retailers a chance to capitalise on rapidly changing customer expectations.

In a study of over 6,000 consumers across the UK, US and the Benelux, undertaken by consumer behaviour firm Salmon, almost nine in ten respondents claimed speed of delivery was more important than brand prestige when shopping online.

The research also uncovered a sudden shift in consumer expectations in the last year. Some 60 per cent of respondents felt same-day delivery should be offered by all online retailers. In 2016, the same study found the average expected delivery time to be 2.6 days.

Meanwhile, 60 per cent said they would be more likely to shop with a retailer that demonstrated digital innovation in its shopping experience, with three-quarters expecting to spend more online in the future.

However, as services such as Amazon Prime and virtual home devices tear up the ecommerce rule book, online retailers could be coming up short in meeting consumer expectations.

A majority believed the technology and apps they used day-to-day were more sophisticated than the services provided by online retailers, while almost seven in ten said ecommerce stores needed to go further in improving the customer experience through greater innovation.

Commenting on the findings, Hugh Fletcher, global head of consultancy and innovation at Salmon, said online retailers had an opportunity to take advantage of shifting shopping habits.

“Loyalty is a complex thing. Across all sectors, we’re seeing fewer people favouring and remaining strongly aligned to certain brands and companies,” Fletcher explained.

He added: “This is especially prevalent in digital commerce – where the consumer focus on finding the lowest prices and fastest delivery doesn’t lend itself to being loyal to a certain product.”

Fletcher confirmed that investing in the customer experience would be vital in capturing the loyalty of future generations, offering smaller brands an opportunity to invest in the right areas and challenge larger competitors online.

“What this means, however, is that retailers need to offer consumers a host of convenient services and harness innovative technologies in the process if they are going to attract and retain customers’ attention.

“As consumers are becoming more open to trying new technologies – or expect to in the coming months – retailers need to put in the ground work from now if they are to meet high expectations.”

Why a shift in millennial brand loyalty creates opportunities for small businesses

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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