Rewarding loyalty is a must for online retailers and brands
Last year’s Black Friday data shows quite clearly just how important eCommerce has become to consumers. While high street footfall dropped, online purchasing soared, but retailers and brands cannot afford to rest on their laurels.
Recent research that MetaPack carried out amongst over 3500 consumers in the UK, US and Europe illustrates sharply that shopper power determines the strategic decision-making for eCommerce retailers and nowhere more so than in the delivery choices that they offer.
To keep customers loyal, retailers need to stay on their toes.
We asked our cohort of research respondents how likely a positive delivery experience would be to encourage them to shop with that retailer again, and in the UK a massive 84% said very or somewhat likely.
Of course, the flip side to that is when a delivery goes wrong - in fact, over a quarter (29%) of Brits said they would never shop again with an online merchant following a negative delivery experience. When it comes to winning and keeping customers, delivery has the power to make or break the online shopping experience.
Amazon, which knows a thing or two about marketing to its customer base and keeping it happy, has set much store by listening closely to what shoppers want and creating competitive advantage. Prime, its loyalty programme, now offers many benefits to members, but what it is best known for is free, one- or two-day delivery on most items that it sells on its marketplace.
consumers value personalisation and individualism and want their loyalty to be recognised
Amazon understood early on that customers will have no compunction in abandoning an online shopping basket if the delivery choices on offer are unsatisfactory, and instead of taking that risk, it promised to provide a high standard of delivery choices and enfolded its shoppers into a long-term, highly beneficial commitment in return.
This works well with consumers who value personalisation and individualism and want their loyalty to be recognised and rewarded. In the UK, 69% of our survey respondents said that they would like the eCommerce websites they use regularly to offer a delivery loyalty program, with their loyalty rewarded by free or quick delivery. Looking at the total number of respondents, 86% said they would even prioritise shopping with that retailer.
So, it’s not surprising that other online merchants are following in Amazon’s footsteps and introducing loyalty schemes that customers are prepared to pay for. Typically, however, today’s savvy shopper is fully aware of how best to make this work for them. Over a quarter (27%) of shoppers from our survey already belong to at least one programme – a further 22% subscribe to two or more schemes. The younger they are, the more likely to be taking advantage, with 68% of millennial shoppers utilising up to seven delivery loyalty programmes
If retailers are considering launching a loyalty scheme it’s worth noting that 39% of consumers say they plan to join at least two programmes in the next year.
The privileges that consumers perceive come from membership of a loyalty scheme have distinct benefits to their relationship with the retailer. Most say they shop more with e-tailers that offer delivery loyalty programmes – and almost a third are prepared to pay an annual fee for premium benefits that eliminate the need to factor in the delivery cost of their purchases.
a third are prepared to pay an annual fee for premium benefits
What is also telling is that 42% say that loyalty schemes make them feel special and 55% will prioritise one retailer over another if it offers a delivery loyalty programme – an important fact when considering strategy for the year ahead.
One other area in which online retailers could make changes that would encourage loyalty from customers is by working in consolidation with each other. This might be particularly appropriate for those e-tailers looking to drive down the cost of delivery – or utilise drop shipping fulfilment or crowd-sourcing warehousing strategies to achieve greater proximity to customers and fulfil orders faster – our research shows that shoppers are more than eager to participate in multi-vendor delivery loyalty programmes.
Almost three quarters (71%) indicated that the idea of joining a scheme involving multiple retailers and brands working together to offer premium delivery services held a strong appeal for them.
One final point for consideration. Consolidated delivery, particularly as part of a loyalty scheme, ticks many boxes for consumers, but there are indications that it might also prove popular with those that are interested in buying from retailers with green credentials.
27% of consumers said that they care a great deal about the impact on the environment of their online shopping deliveries whilst 47% say it’s a big concern for them. It might just be that the consolidated delivery trend has the potential for more than one positive outcome.