With privacy changes coming from Google and Apple, retailers critically need to use the first-party data they have to focus on long-term profitability from existing shoppers rather than exclusively chasing the endless pursuit of new shoppers (who normally only purchase once, then never again). Since one-time buyers eat into acquisition costs with no return, it’s no surprise that brands are making loyalty a priority this year.
But what exactly “loyalty” looks like can mean many different things depending on which brand you ask. We sat down with top retail marketers from brands including Olly, Bass Pro & Cabela’s, Ascena, Lane Bryant, American Signature, Foot Locker, GreaterGood, REI and more to hear about the strategies they focus on to drive loyalty and how they’re measuring that return.
What is retail loyalty?
Again, brands define this very differently. Some brands think about loyalty as a specific program and measure success by how many loyalty points a shopper accrues over time. Some brands have loyalty apps, and may measure success based on how many logins they get to their app. Some brands see loyalty as a measure of satisfaction and positive reviews.
These are all great. But, the baseline of shopper loyalty is all about repeat purchases because that’s what impacts the bottom line (you can get more of our take here).
Think about it as a relationship — starting with the word engagement. Shopper engagement is something we talk about all the time as retail marketers. But an engagement should be more than a click. Just like any relationship, engagement should represent dedication and commitment — and a retail marketer’s love language is a purchase. Simple as that.
Let’s take a look at some of the strategies we discussed to foster those long-term relationships that keep shoppers buying again and again.
5 Tips to create loyalty that lasts
It’s important to keep in mind that we’re building relationships here, not fleeting friendships or first dates. Each action should contribute to a larger picture of understanding your shopper and knowing their preferences and the things they love. So when you’re approaching a new strategy to build shopper loyalty, it’s important to make sure that it has staying power and contributes to the overall lifecycle for each shopper. Here are the strategies and tips we learned from top retail marketers across home goods, apparel, health and beauty, footwear and sporting goods.
1. Each channel should run toward the same goals
Loyalty is all about keeping the shopper first, and each channel needs to orient around the shopper to achieve that goal. One of the best ways to do that is to create a common set of measurements that each channel can drive toward as an outcome. For example, repeat purchases, multi-time buyers and increased lifetime value are all measurements that demonstrate a deeper level of impact on long-term revenue than channel-centric measurements like opens, CTR and impressions. Developing a clear set of success metrics will give your shoppers consistency and your cross-channel teams alignment.
2. Omnichannel should mean omnishopper
Whether your shopper is browsing your store, your ecommerce site or social platforms like Pinterest or Instagram, each shopper’s experience should be consistent every time. To do that, you need to capture and tether all of your identities to get the whole view of the shopper so you don’t miss a beat and act on every shopper signal that comes in to nurture shoppers on their level with personalization. This means that your loyalty IDs, cookies, phone numbers, emails and any other identifier should be connected. With traffic moderating coming out from the peak of COVID, this is even more imperative — but it can be tricky. Sometimes it’s hard to bridge those gaps from owned to paid channels. But making steps to consolidate or tether your platforms in a way that allows you to get that 360° is critical. Every new signal you get is an opportunity to learn and improve experiences to create that lasting loyalty (think long-term relationship) that keeps shoppers coming back again and again.
3. Sell cross-category to generate loyalty
Within your shopper’s lifecycle with your brand, there are almost infinite possibilities to introduce them to something new with cross-category buying. Cross-category doesn’t just increase revenue, but it also increases lifetime value. Creating a clear set of personalized recommendations leveraging what you know about the shopper and your product catalog is a great way to do that. For example, if you’re a sporting goods retailer and a shopper buys a tent, then their next recommendation might be a stove to complete the picture. This doesn’t just increase revenue, but actually adds value to the original purchase. And again — keep it personal. Say you’re an apparel retailer and your shopper buys jeans — they might want a top next, but based on the data that you have, they may show more of a proclivity for basics. This gives you the knowledge you need to level up with recommendations that go deeper into contextual data. There’s always something new to explore, and surfacing those next best purchases for shoppers will always keep them excited for their next buy.
4. Know each shopper’s repeat purchase cycle
Each of your shoppers has a unique buying cadence. Brands often try to figure out an average repeat purchase cycle for shoppers, but this is hard to do. Shoppers change dynamically without any indication of where they’re going next — so you need to capitalize on that in-the-moment signal and leverage your product catalog to meet those interests and increase repeat buyer rate. That way, you’re catching each shopper when they’re most likely to make that next purchase — rather than treating repeat purchases en masse.
5. Create emotional loyalty
So we’re building relationships. And a critical component of that is emotional loyalty — you’re already engaged, but you need to go a little bit deeper by creating connections with shoppers that pull on their heart strings.
The honeymoon phase
Every relationship has a honeymoon phase — and the same is true for your shoppers. They just purchased a product they loved and want to tell the world. This is a good time for you to ask shoppers to review products and to surface personalized recommendations and cross-category products. You can even extend the honeymoon phase by making them feel proud about their purchase by asking for photos in the reviews, educating them more on their purchase (could be sustainability efforts or ways to use or style the product they purchased) and more. Creating more of an emotional connection through pride and knowledge is a great way to build loyalty from shoppers who are in it for the long run.
Build a community
Brands are creating amazing communities in both the IRL and URL to stand out this year and create those emotional connections. Some ways brands are doing this is by partnering with local communities to build those emotional connections beyond just the products. An added bonus of in-person events is culling new shoppers to communicate with by capturing their emails or phone numbers and adding it to a nurture campaign that speaks to the connections they made when they engaged.
Loyalty is about revenue, not the transaction
At the end of the day, loyalty is about profitability (and the revenue opportunity is huge). But that doesn’t mean that loyalty is all about a transaction — it’s actually about the experience. When you’re in a relationship, you learn everything about the person and you can use it to get closer and strengthen your relationship over time. Shopper loyalty is the same. You’re creating a series of connected, compelling moments simply by knowing your shoppers. For them, this feels less like a transaction, and more like a relationship that lasts. For you? It’s revenue.