Demise of Loyal Retail Customers in the Digital Age

Loyal retail customers have for long now given Bricks and Mortar (BM) retailers an advantage over their competitors. However, the advent of the internet and the subsequent development of the online shopping channel have changed the shopping behavior of retail customers.

Although BM retailers have invested millions of dollars in customer loyalty programs, the convenience, speed and assortment of products customers enjoy online lured many loyal customers away. This is apparent with the closure of thousands of retail stores, and the vanishing of well-known retail brands over the last couple of years.

The big challenge for BM retailers is to the get customers back to their stores. Thereafter, the retailers should have a strategy in place to keep them coming back. In other words, making their customers loyal again…

What are loyal retail customers?

Customer loyalty is according to PR Loyalty Marketing both an attitudinal and behavioral tendency to favor one brand over all others. This may be due to satisfaction with the product or service, its convenience or performance, or simply familiarity and comfort with the brand.

Loyalty is formed in four stages – cognitive, affective, conative, and action.

Cognitive loyalty – in the first loyalty stage, consumers develop value expectations and preference for one brand relative to other available alternatives.

Affective loyalty – here the consumers begins to develop a liking or attitude towards the brand based on an increasingly satisfying experience with the brand.

Connotative loyalty – the third stage, which is confined to consumer’s behavioral intention. The consumer has deeply held commitment to buy the brand.

Action loyalty – is where the desire and intention in the previous loyalty state has translated into realistic loyalty actions or behaviour.

It takes time, money and commitment from retailers to get loyal retail customers. This process, mostly took place at the BM retailer’s store in the local shopping center. However, retail customers in the digital age can shop anywhere, at any time, at the best price.

So, BM retailers need to rethink their customer loyalty programs. They need to find out what “delights” their customers. How has the internet and the online retail channel affected their shopping behavior in the retail stores?

Loyal retail customers in multi-channel retail

Retailers can nowadays rely only on more than one channel to do business with. As a result, most BM retailers adopted e-Commerce to become Bricks and Clicks retailers. Online retailers, on the other hand, started to open physical stores to serve as showrooms for their products. Indeed, loyal retail customers need to be found outside the traditional retail channels.

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