When it comes to consumer loyalty, digital brands are leading the way.
According to Brand Key’s annual Loyalty Leaders List, 35 percent of those that made this year’s index are represented by digital technology, social networking brands or brands that use both. Non-digital retail brands, including those in apparel and footwear, are also upping the ante on their customer loyalty efforts, with 17 percent nabbing spots on the list.
“The shifts in loyalty leadership have been monumental this year,” said Brand Keys’ founder and president, Robert Passikoff. “And while digital brands not only represent the lion’s share of this year’s list, they also command 80 percent of the top 20 loyalty leaders spots as well.”
Digital brands, including Amazon and Zappos, ranked in the top 20 loyalty leaders this year. Amazon jumped to second place for online retail, compared to eighth place in 2015, while Zappos fell to 20th, down from 12th place last year. Amazon also stole additional spots on the top 20 list, including seventh place for tablets and ninth place for video streaming.
According to Passikoff, the consumer loyalty established by these brands indicates that consumers are six times more likely to use the brands’ products and services in other categories outside of online retail.
Surprisingly though, the largest loyalty shifts are occurring in more traditional shopper areas, including apparel retail and athletic footwear. Digital brands and non-digital brands that maintain online presences are benefiting from this shift.
Brands that achieved the greatest increase in consumer loyalty this year included Nike, Ralph Lauren and Under Armour. Nike went up 16 points to 15th place, Ralph Lauren went up 19 points to 24th and Under Armour went up 13 points to rank 28th. All of these apparel and footwear retailers have store locations, e-commerce websites and personalization strategies that boost their consumer loyalty rankings.
These loyalty shifts also bring challenges for non-digital brands.
While digital-brands are actively engaging with consumers on social media platforms and in online marketplaces, some non-digital brands are struggling to connect with consumers emotionally and meet their expectations for experiences.
With this divide, many non-digital brands are finding difficulty in maintaining consumer loyalty. Some non-digital apparel brands, like Gap (which went down 20 places to No. 93 on the list), might have received lower rankings this year as a result of these obstacles.
“This environment forces brands to work harder to create emotional engagement—the ability for a brand to be seen as meeting consumers’ ever-growing, emotional expectations for their ideal, brand in whatever category the brand competes,” Passikoff noted. “Today emotional engagement is the predictive yardstick for loyalty, market share and profitability.”
With this in mind, digital brands and non-digital brands may want to consider emotional engagement, personalization and experiences as priorities to remain successful in the consumer loyalty game.