NEW YORK — Meeting consumers on something they care about is the winning strategy for brands and retailers trying to gain loyalty in the age of disruption.
That was the conclusion of Andy Mantis, executive vice president of Checkout Tracing at The NPD Group, who spoke on “Gaining Loyalty in the Age of Disruption.” His gave his presentation Wednesday at a Retail Marketing Society meeting at Arno Ristorante here.
“Regardless of category, emerging brands and retailers need to connect with consumers in new ways to meet or exceed their expectations,” Mantis told attendees.
One area that is resonating with consumers is personalization. That’s in part due to the shift in what’s now important to consumers. “It used to be that you would pay attention to a particular designer, so you pay attention to the runway [show], but now it’s about the consumer’s own brand, and what is on the person,” Mantis said. He also noted how five to seven years ago consumers aspired to high-end items, but now luxury jewelry sales are down while spa treatments are up. “There’s a change in where people are placing their dollars,” Mantis said.
Mantis noted that consumers are going out of their way to save a few bucks — 19 percent of the spend is at Dollar Tree, Dollar General and Family Dollar, from households with an annual income of $100,000 — because “no one is willing to overpay anymore.”
Personalization has become important because consumers are focused on their own personal brand, Mantis explained. That personal brand could be a “signature item,” such as a big television screen on a wall, a high-end handbag, or for the cooking enthusiast, a Kitchen Aid appliance.
Consumers in different demographic groups also shop with a different mind-set. Younger Millennials with $50,000 to $75,000 in annual household income last year spent their dollars at over 100 different retailers, including services such as Lyft and grocery purchases. Older Millennials focused their spending more on family needs, while Gen X bought necessities. Boomers focused on home improvement, pet supplies and convenience purchases, while buying fewer apparel items.
Even the brands that captured their dollars were different by generational group. Younger Millennials spent money on Uber, Lyft, Airbnb and iTunes. Older Millennials bought from J. Crew, Sephora and Gilt, but also spent for services such as Lyft and Uber. Gen X purchases were at Gilt, Costco and Fresh Direct, while Boomers bought at Sears, Macy’s, Kohl’s, Costco and Restoration Hardware.
Customer experience is also an area where retailers and brands have the opportunity to capture and keep consumers’ loyalty. Loyalty cards is one way. Another is great service. Established players such as “Nordstrom, Sephora and REI” were cited by Mantis as “getting it right,” with a callout to Nordstrom for having share of wallet, a focus on being customer-centric and excellent service.