Cut Prices, Cut Loyalty Loyalty to Britains supermarkets falls by 9%
National survey investigates the state of loyalty in Britains retail sector today
A 2,000 consumer survey from loyalty specialist The Logic Group and global market research company Ipsos MORI, has revealed that second only to banks and building societies (71%), consumers demonstrate the highest levels of loyalty to supermarkets, where 63 % of respondents felt that they are loyal to one supermarket.
The survey also demonstrated that loyalty programme adoption still remains relatively low in sectors outside of retail, although numbers appear to be on the increase. 56% are members of loyalty programmes for shops, versus only 10% in the entertainment and going out category, and 9% for travel and hotels.
Supermarkets – the greatest traditional exponents of the loyalty programme – would seem to be continuing to lead the way. However, the sector also experienced the only significant drop in loyalty across all the sectors surveyed year on year, from 72% in 2009 to 63% in 2010.
What makes this all the more surprising is that supermarkets have generally been seen to have had a ‘good recession’. One possible cause is that the focus on price seen during the recession has undermined feelings of loyalty towards individual supermarkets. Consumers may be getting a better deal, but this has come at a cost as far as the customer relationship is concerned.
Anamaria Chiuzan, customer insight and loyalty senior marketing manager at The Logic Group comments, “The results of the survey demonstrate that although supermarkets are still leading the way with customer loyalty programmes, during the recession loyalty in this sector suffered a pronounced drop.
“Although customer loyalty to supermarkets remains high, a nine per cent fall in one year should cause concern for supermarket bosses; notwithstanding the considerable amount of time and money invested in retail loyalty programmes.
“The retail sector is a highly competitive environment and businesses are under ever-increasing pressure to retain customers. One concern is that the foundations of retail success, service and brand value, have been weakened in the great play on price. Consumer loyalty can’t be won on value alone; good deals must go hand in hand with relevant offers.”
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