By Dan Edelman, vice president and UK general manager, merchant services at American Express
The recent ONS retail sales figures covering Christmas period trading revealed a high street that’s feeling the pressure. However, by looking closer, there are clear winners and losers with multiple high-profile retailers reporting strong sales over the period. Whilst the experience of a select few retailers doesn’t necessarily show the whole picture, it does suggest many consumers are still spending, and not behaving in the way many predicted when it comes to parting with their cash.
But with selective spending comes high expectations. Inconvenience, poorly targeted offers and disappointing in-store experiences will undoubtedly see value-conscious customers look elsewhere for their favourite items. This means retailers need to do everything they can to retain and grow their customer base during challenging times.
Research conducted by American Express last year found that three fifths (61%) of shoppers believe retailers need to do more to meet their expectations to both win and keep their loyalty. It’s clear that as the cost-of-living pressures continue, merchants can’t afford to lose out to those competitors offering a superior customer experience – yet clearly many are still falling short.
Prioritise loyalty to differentiate
Delivering a great customer experience doesn’t just mean supplying a quality product at a reasonable price. Merchants need to do everything they can to give consumers value that keeps them coming back time and time again.
Our research found that over half (52%) of shoppers would be more likely to shop with a retailer that has a loyalty scheme – so the merchants that effectively reward their customers will gain a crucial advantage. Whether it be discounts for repeat customers, loyalty points or the chance to enter prize draws, providing added value that goes beyond consumers’ immediate purchase is a key weapon in the armoury in the battle for loyalty.
But whilst having a loyalty programme is a step in the right direction for any retailer, it’s no secret that they’re commonplace. In what is an already saturated market, it’s unsurprising that many loyalty schemes don’t appeal in the eyes of shoppers. For example, over two fifths (43%) said they found loyalty points hard to use, and often not even worth claiming back.
Reward schemes need to be just that – rewarding. For a scheme to be worth the time and investment, they must be designed from the outset to be accessible, personalised, and easy to use if customers are going to find genuine value in them.
For example, we’ve found with our Amex Offers programme that offering year-round benefits rather than only rewarding customers during seasonal peak periods is a way to foster a genuine sense of value. Our curated range of Cardmember offers help drive incremental spend from a broader range of consumers; taking a customer-centric approach like this means businesses can instill that sense of value across their customer base.
Upgrade your customer experience
Implementing a loyalty programme is just one aspect of the customer experience but retailers should be looking at the full picture. Our research highlighted that almost three-quarters (73%) of shoppers wouldn’t buy from a retailer again if they had a bad experience, so optimising the customer journey is essential.
Creating a seamless experience, both in-person and online, where customers can browse, pay and have their goods delivered when and how they want, is crucial to driving positive engagement. That may simply be accommodating last minute purchases or ensuring their preferred payment method is available at checkout.
Those retailers that look holistically at the value they deliver for consumers, both in rewards and the end-to-end customer journey, will be best set to succeed in the year ahead.
