Where Have All the Loyal Customers Gone?

I was reading an article in the Seattle Times a few weeks ago about market research conducted by the Hartman Group that promotes the theory that consumer loyalty is shifting away from product and brands and towards retailers, particularly those that offer the consumer an “experience” and not just stuff to buy.

Some say that retailer loyalty has emerged because of the new tightened economy we are experiencing, but others think that consumer shopping habits were already changing long before the bubble burst.

It is well documented that consumer brand loyalty has been declining consistently for over a decade, with a pretty direct correlation to the rise in online shopping.  Since consumers now have the “control” in terms of selection and price alternatives.  I think we want to more closely identify with the places we shop and feel that we share common values and vision.  Whole Foods, the Apple Store, Starbucks and Nordstrom are good examples.  They are an extension of who we are (or aspire to be), and they allow us to express ourselves to others just by shopping there.

Have you been to one of the Lush retail HBA stores (www.lushusa.com)?  They offer “fresh handmade cosmetics” and display soaps and scrubs as if they were cheese or pastries.  It is really an experience.  My wife could live in one of those stores (if the fusion of scents wasn’t so overpowering).

My point being that shopping in America today is more and more about getting a good value BUT at the same time having an out-of-the-ordinary experience, whether at a brick and mortar or online retailer.  Smart product manufacturers will find ways to partner with these value-added retailers to make their offerings a part of the customer experience.

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One Response to Where Have All the Loyal Customers Gone?

  1. David Shantz says:

    An interesting proposition. A hypothesis that has some holes.

    1. People don’t shop at the Apple store to express who they are to a bunch of strangers who happen to be there. They are there because the products solve a problem or meet a need, either tangible or emotional. The idea of lifestyle retailing is fashionable marketing rhetoric, don’t fall for it.

    The internet is empowering brands to have a direct connection with their customers. Sure, your direct sales will never be as large as Amazon’s but even Amazon recognizes the power of brand preference in that there are thousands of store sites they host on behalf of specific brands.

    Try creating your own direct sales channels. It works, but you will have to understand interactive direct marketing and social media to make it a strong channel.

    Brands and manufacturers will own the future, the customer and profits.

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