What motivates a customer to purchase products from a particular brand? It’s a familiar question that has perpetually been asked by retailers around the world, but they have often struggled to settle on a conclusive answer because there are multiple factors at play and consumers’ needs, preferences and shopping behaviours are continually evolving. It has been particularly challenging since the pandemic. According to McKinsey & Company’s COVID-19 US Consumer Pulse Survey, economic pressures, store closures and changing priorities have prompted 75 per cent of US consumers to change their shopping behaviour since the start of the pandemic. Research found that 36 per cent have tried a new product brand, a trend that was partly driven by popular items being out of stock due to supply chain constraints. However, 73 per cent of those who had purchased products from a different brand said they would continue to do so. This suggests that the drivers of loyalty are once again changing, according to Shanthi Rajagopalan, senior director of strategic planning for worldwide retail and consumer goods at Microsoft. “The e-commerce explosion has turned consumers into ‘super surfers’ who jump between different channels, devices and websites as they shop and this has caused shocks to loyalty,” she says. “While price and quality have historically been (and largely continue to be) the main drivers behind customers’ purchase decisions, they’re increasingly considering factors such as whether a brand offers convenient and personalised services, and whether it aligns with their own ethical, social and environmental values.” If brands don’t meet their expectations consumers are also increasingly happy to turn to a competitor that does. “Research from PwC suggests that 59 per cent of consumers will walk away after several bad experiences while 17 per cent will do so after just one incident,” says Rajagopalan. “So, it’s clear that customer experience is the new battleground for brands that want to become – and remain – the top choice for every consumer.” Turning shoppers into lifelong customers has always been a top priority for retail brands, but it is challenging to find the perfect mechanism, according to Guy Elliott, executive vice president and industry lead for retail and consumer products for Europe, Middle East and Africa, and Asia Pacific, at consulting firm Publicis Sapient. The key drivers of brand loyalty are changing, and today’s highly discerning consumers will happily switch brands if a retailer does not offer the products, services or experiences they want. Microsoft’s Shanthi Rajagopalan and Publicis Sapient’s Guy Elliott and Hilding Anderson discuss how retail brands are adapting to ensure they remain first choice for every customer BY R E B E CCA G I B SON R E TA I L & CG 191
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