Like everything else these days, consumer attitudes about loyalty are evolving—and yet many retailers aren’t keeping pace with these new behaviors and what they mean for retail businesses.
Oracle’s new report, “The Loyalty Divide: Retailer and Consumer Perspectives” takes a deep dive into the disparate loyalty points of view held by merchants and their shoppers and uncovered distinct consumer profiles: The Broadcaster, The Enthusiast, The Lazy Loyal and The Seeker. Understanding each type of customer—and other loyalty insights—can afford lucrative opportunities for retailers to fine-tune their offerings and better align their reward with what shoppers really want.
Above all, though 58 percent of retailers think their offers are mostly relevant, just 32 percent of consumers agree, according to the report. That’s retail’s biggest misconception. Right behind that, retailers maintain a fundamental misunderstanding how engaged consumers truly are with their loyalty programs. For example, a scant 4 percent of retailers indicate that consumers “rarely” just their loyalty offerings, while a much higher 19 percent of consumers say they sign up for these programs infrequently. Again, retailers expressed overconfidence in consumers’ affinity for loyalty plans; 58 percent think consumers sign up for every one that’s available while not even one third (32 percent) of consumers said they actually do.
What’s interesting is that consumers seem to think that the ideal retailer loyalty relationship is not a two-way street but a threesome—that involves influencers. While 48 percent of consumers surveyed by Oracle said they’re more likely to trust brands that have been reviewed by YouTube personalities, more than half (55 percent) of retailers are not yet working with influencers in this capacity.
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A look at consumer demographics also points into age-driven affinities regarding retail loyalty. Gen Z (43 percent) and millennial (44 percent) consumers polled by Oracle said in greater numbers that they’re more loyal than before. Compare that with the 19 percent of baby boomers who feel the same way. There likely a number of factors are play here. Younger consumers just coming into their spending power could be just discovering brands and settling into that strong affinity. Boomers, on the other hand, likely have had long brand relationships, aren’t getting into many new ones and thus could be just fine with the status quo.
Consider also that consumers are “behaving” in ways that many retailers don’t properly recognize as loyalty activities; in fact, the Oracle report indicates a notable departure between consumer behaviors and what retailers are trained to think of loyalty actions. For example, consumers might visit a brand’s site more frequently (34 percent) and spend more with a brand (31 percent) than others, and sign up for a loyalty card (25 percent)—all “sanctioned” loyalty activities. But what of the 31 percent of consumers recommending that brand to their circle of friends and family, the 20 percent following a brand’s activity online or the 14 percent taking the time to post a review online? These behaviors often go overlooked by retailers, 28 percent of whom take into account the previously mentioned “activities.”
In fact, the report found that social is playing a far bigger role in how consumers express loyalty and affinity today. Consumers are interested in sharing photos of their retail experiences through social media (43 percent), using social to research brands (53 percent), likely to start following influencers posting about their favorite brands and retailers (43 percent) and save ideas they see on social about brands and retailers (46 percent).
Getting to know the four loyalty personas
According to Oracle, any given consumer can adopt any of the four loyalty personas depending on what they’re buying. “The same person might be a Broadcaster when they shop for fashion, an Enthusiast when purchasing artisan foodstuff, a Lazy Loyal when it comes to technology and a Seeker when replacing appliances,” the report noted. “In today’s complex, 24/7 world, we’re all shape shifters as we navigate the retail landscape.”
In essence, The Broadcaster is vocal about sharing via social media experiences that incite passion—whether positive or negative. On the other hand, The Enthusiast is described as “loyalty personified.” It would take something major, the report said, to lose the loyalty of this consumer, who is seeking high quality and an agreeable shopping experience. The Lazy Loyal maintain an affinity to specific retailers “because it’s easy,” the report explained. This consumer doesn’t want the hassle of shopping around, preferring convenience instead. Are loyalty points redeemed automatically? Even better.
Last but not least is The Lazy Loyal’s opposite—The Seeker, who tends to shop around in search of the best offer out there. This consumer “isn’t moved by aspirational marketing, brand loyalty, social alignment or distracting ad campaigns,” the report explained.
Knowing how shoppers fit into these profiles can help retailers deliver loyalty offerings that resonate—and drive bottom-line results.