Covid disrupted virtually every aspect of the global marketplace, including brand loyalty. In countries as diverse as France, South Africa, China, India and the US, more than half of consumers said the pandemic led them to try different brands and new places to shop—and they signaled a high likelihood (65%+) that those behaviors would be permanent.
Another buying habit re-shaped by the global health crisis is growing consumer reliance on e-commerce and a preference for digital payments. Worldwide, consumers spent an additional $900 billion at online retailers in 2020, a 6% increase in incremental e-commerce penetration. Moreover, it’s projected that 20% to 30% of that pandemic-related digital shift will be permanent.
In a report entitled Customer Loyalty & Engagement in the Covid Era Mastercard reports that the disruption caused by the Covid pandemic touched virtually every aspect of the global marketplace, including brand loyalty.
“Loyalty programs are evolving as retail marketers adjust to shifting consumer expectations, deploy digital tools to understand new behaviors and needs, and work to reconnect with customers.
“In this report, we cover the five steps for a successful migration, including an action plan and takeaways for each step,” it is stated in the report
This guide is designed to help retail marketers uncover strategies to build and regain customer loyalty through pandemic recovery.
“74% of consumers are more likely to buy from brands that demonstrated concern and provided excellent care for customers during the pandemic.”
More from the report:
Loyalty programs are also evolving as retail marketers adjust to shifting consumer expectations, behaviors and needs. There are four ways retail marketers can re-calibrate their loyalty programs to further align with consumers in the Covid era.
1. Return to comfort basics
Meet your customers in their current headspace. Nearly 75% of consumers are more likely to buy from brands that demonstrated concern and provided excellent care for customers during the pandemic. Many are experiencing emotional fatigue from pandemic life and want every shopping experience—whether in-store, in-app, or online—to be as convenient, simple, and satisfying as possible. Rewards that make buying things easier—free shipping, same-day delivery, order waiting, volume discounts—will be well-appreciated.
2. Trust their feelings more than your own
Ask, listen, and be prepared to change. The pandemic upended your customers’ personal and professional lives. Don’t assume you understand their “new normal” in terms of what they need or want from you—or that previous engagement strategies are still relevant. In a survey of 1,800 business executives, when asked what improvements they made to their customer experience during the pandemic, the top answer was more frequent communications to customers. Unfortunately, 10,000+ consumers queried in the same research said that “frequent communications” from companies was the LAST thing they wanted during the pandemic. To find out what your customers now value most highly in their relationship with your business, solicit their feedback directly. And do it in targeted, meaningful ways that demonstrate your empathy and willingness to make substantive changes that align with their needs. Other valuable sources of information to help you adjust your loyalty experience are feedback from frontline employees and customer-level insights from social media.
3. Socialize and gamify
Social commerce has taken off during the pandemic. In the U.S. alone, sales driven by interactions on social media are expected to reach $36 billion in 2021, a 35% increase from 2020. Experientially, social commerce recreates the fun of shopping with friends in brick-and-mortar stores but in the digital world. Integrating gamified rewards with social media can be an especially potent way to nurture consumer loyalty in the Covid era. Rewards are typically structured in levels and points achieved during the game, which customers can use to make purchases. Gamification of rewards programs captures interest and exerts tremendous emotional appeal—providing consumers with a welcome distraction from the months of social isolation, Zoom meetings and take-out meals.
4. Dive deeper into customer data
Most retailers have a mountain of customer data that can be mined to nurture deeper and more profitable customer relationships. One powerful tool to extract greater value from a customer database is micro-segmentation. Through micro-segmentation, a customer database is mapped into unique segments based on relevant values, such as financial status, family relationship, risk profile, personality type, and so on. Appropriate data streams are connected to each segment to refine and refresh profiles continuously. This rich, real-time information enables extremely targeted and relevant rewards, offers and communications so that each customer feels their interests and needs are anticipated and satisfied by a brand.
The right technology partner can help a retail marketer take these steps and more to revamp their loyalty strategy. Pick a partner with the experience to understand your business and your loyalty program objectives, the expertise to design initiatives aligned to your goals, and the resources to ensure successful activation. The result can be transformational, turning your loyalty program into a formidable engine of brand relevance and profitability optimized for the challenges of Covid-era customer relationships.