As convenience continues to rule retail in order to comply with consumer behavior, it is a practice that Fayez Mohamood, chief executive officer of Bluecore, says may be causing a disruption in loyalty. Consumers are enticed by ease, often willing to try what’s new as they chase convenience.
“Convenience has created competition for loyalty,” Mohamood said. “With Amazon winning in that department, consumers have to feel a strong draw to a brand that trumps convenience.”
As an example of a brand practicing a strong draw to its consumers, Mohamood points to Sephora’s Insider program, which offers professional cosmetics courses hosted by Make Up Forever and full-size complementary products to its Rogue members.
According to Mohamood, as consumers have an eye on the next new experience, retailers have shifted to disproportionately focus on consumer acquisition rather than retention. In this practice, consumers are often not experiencing post-purchase attention, which leads to second purchases and consequential loyalty. “Repeat purchases, which are a result of retention tactics, are crucial to gaining customer loyalty,” Mohamood said. “As loyalty grows, so does lifetime value.”
This will be especially poignant as online sales skyrocket during the coronavirus outbreak, and retailers and brands wrestle for market share.
Bluecore’s data shows that 60 percent of second purchases will take place within the first 100 days of first purchase. And, more significantly, reports a 95 percent increase in additional purchases between one-time and two-time buyers.
“Consumer hyper-adoptive-ness is a natural byproduct of technology’s evolution,” Mohamood said. “The consumer has been trained to always want new and more, and next-gen communication technologies and social networks have set a new bar for how fast they can get it.”
With consumers spending much of their time on social media when previous generations spend free time at shopping malls, expectations of experiences have also drastically changed. “Now, if a brand they like doesn’t offer constant instant gratification, another one will,” Mohamood said. “This is where we see this exponential increase in adoption activity — [again] leading to a lack of loyalty.”
To earn loyalty in trust, many brands have experimented with a try-before-you-buy program. For example, Il Makiage offers a 14-day trial period for foundation and Warby Parker offers consumers the ability to try five frames at home for five days. “This gives the consumer the ability to introduce the product into their everyday life and see if it’s a fit for them before they commit to a full purchase,” Mohamood said. “It demonstrates a brand’s commitment to the unique experience of each customer.”
“Consumers are also buying when retailers show a clear understanding of their preferences and where they like to shop: tailoring thoughtful product recommendations to their tastes, making offers based on their buying habits, and communicating through their preferred channel,” Mohamood said.
To overcome the challenge of hyper adoptive consumers pose, Mohamood tells WWD that retailers must “obliterate organizational and data management silos to ensure that teams are aligned to support core business objectives such as driving repeat purchase, lowering the cost of acquisition, preventing margins and encouraging product discovery.”
As illustrated by Stitch Fix, FabFitFun and Birchbox, among others, consumers are often charmed by a product discovery in a subscription-style format that caters to personalization as well as convenience.
“The idea of receiving products tailored specifically to their style on a regular cadence is a nod to consumers’ willingness to pay for product discovery that is completely unique to them time and time again. Brands like Stitch Fix, that leverage AI technology to make sense of the countless data points involved in a consumer’s engagement with products, do this very well.”
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