7 Ways Retailers Like Nordstrom, IKEA, T-Mobile and TOMS Generate Brand LoyaltyMar 9, 2018 - by Mike O'Brien
In today’s digital world, consumers can buy whatever they want, whenever they want. And with so many people carrying all of the information in the entire world in our pockets, shoppers are often just as knowledgeable as the salespeople. Together, this creates a perfect storm that turns the concept of brand loyalty upside down.
Brand loyalty is certainly not dead; we’ve found that for many retailers, 95% of revenue comes from just 5% of shoppers. It’s just that modern brand loyalty is dictated by experience more than anything else. Still, “what creates brand loyalty?” isn’t a question with a cut-and-dry answer, but CrowdTwist tackled it anyway with a report inspired by Facebook data.
Facebook surveyed 14,700 American consumers to better understand their relationship with brands. More than three-quarters return to their favorite brands again and again. Of that 77%, 40% are fair-weather fans who choose those brands because of price and convenience, while the remaining 37% consider themselves to be brand loyal. They value trust and service, and wouldn’t switch brands for a better deal, in other words.
No one goes to target because they need something. You go to target and let target tell you what you need.
— haley (@haley_copeland) January 31, 2018
Seamlessness is certainly a factor in brands optimizing the user experience to ensure loyalty. Siegel+Gale found that 64% of consumers are willing to pay more for simpler experiences. Of course, personalization factors into that as well, streamlining the customer journey by only recommending relevant products, for example.
It’s no coincidence that many of the brands CrowdTwist highlighted ranked high in our Retail Personalization Index. Here are seven takeaways from the report:
1. Amazon: Know your customer
Of course Amazon is going to be on the list. The ecommerce juggernaut has a lot going for itself, including seamless one-click shopping and a loyalty program with so many benefits people don’t even mind paying for it. But most of all, Amazon has pioneered personalized product recommendations. Research has found personalized experiences decrease product returns, while boosting revenue, impulse purchases… and brand loyalty.
2. Nordstrom: Make shopping easy
Last year, Market Force Information surveyed more than 10,000 consumers and discovered that Nordstorm was America’s favorite fashion retailer. If that seems like déja vù, it’s because Market Force found the same thing the previous four years. Nordstorm generates brand loyalty through impeccable customer service and seamless, omnichannel shopping experiences. One particularly cool feature allows app users to select items they like and have them ready in a fitting room when they arrive to the store.
3. IKEA: Make shopping fun
Despite being a breeding ground for domestic disputes, IKEA has plenty of brand loyalty, partially for the unique shopping experiences the brand offers. The typical IKEA warehouse is separated into different areas that facilitate the entire customer journey from product discovery to purchase. And throughout, IKEA embraces technology to make that it feel cooler. For example, an augmented reality integration within its app allows consumers to point their smartphones at furniture displays to see exactly how the products would look in their own homes.
4. Steve Madden: Reward loyalty
It’s 2018; nearly every retailer has a rewards program. But do they all have good ones? Steve Madden does, and the footwear retailer uses it to encourage further brand loyalty. SM PASS members earn five points for every dollar they spend in-store or online. However, purchases made in-app are worth even more. And there are plenty of opportunities to earn extra points—sharing their data, connecting their social accounts, writing reviews—that unlock exclusive member rewards.
5. Ulta: Ask for feedback
Personalization factors heavily into Ulta’s brand loyalty. Accenture found that consumers are 75% more likely to shop with a retailer that recognizes them by name, knows their purchase history, or makes recommendations based on their purchase history. Ulta monitors social media constantly and uses customer feedback to personalize the shopping experience for every customer on every channel.
6. T-Mobile: Figure out where you can be the best
T-Mobile CEO John Legere has said, “The secret for having the happiest customers isn’t a secret at all. Listen to customers, x their pain points and give them a great deal.” He’s clearly onto something; last year, HarrisX ranked the brand #1 in Overall Customer Satisfaction and Likelihood to Recommend. Things that help T-Mobile stand out include an extremely broad coverage (which has tripled since 2015) and the industry’s fastest download and upload speeds.
7. TOMS: Demonstrate your values
Today’s consumers vote with their wallets and last year, MediaCom found that 49% of them are willing to pay more for a product that supports a cause. That number is even higher among Millennials, 60% of whom factor a brand’s values into their purchase decisions. TOMS wears its values on its sleeve, famously donating a pair of shoes to someone in need for every pair sold. Similarly, TOMS Passport Rewards members can redeem their points with charitable donations to after school and community development programs.