American Marketer


It takes more than rewards to earn loyalty of today’s shoppers: report

July 30, 2019

Shoppers' values have drastically changed. Image credit: Bloomingdale's


As the retail revolution carries on and convenience trumps all, consumers are missing out on experiences they crave.

According to new research, 55 percent of shoppers say that one bad experience will turn them off to a retailer or a brand, and 29 percent say that shopping is no longer fun. Per a survey from Klarna, 36 percent of consumers today feel that while convenience has grown, experience has been lost.

“Brand loyalty is a multi-faceted and complicated concept in today’s modern retail landscape,” said Laurel Wolfe, vice president of marketing of growth markets at Klarna. “Customers are no longer satisfied with a points or rewards program.

“To win the repeat custom of shoppers, retailers must create standout experiences that go ‘above and beyond’ to deliver value by focusing on alternative payment options, personalization and checkout convenience,” she said.

Klarna looked into insight from 2,000 United States consumers and 250 retail executives.

Retail revolution
The research shows that even retailers are aware that the experience is lacking and that holding on to loyal consumers is delicate. Thirty-nine percent of retail experts believe that loyalty is no longer driven by rewards, and 69 percent say it is harder than ever to retain loyal shoppers.

In Store Personalized Shopping Experiences

Younger consumers shop at physical stores more than older generations. Image credit: Oracle

It is much easier for consumers to decide to never come back to a retailer than it is to always return. The most shoppers, 46 percent, say that a bad returns process is the top way to drive disloyalty, followed by online checkouts without payment options at 28 percent.

Retailers are struggling to keep up with these changing values and views from consumers, despite being aware that these changes have taken hold.

Thirty-six percent of retailers say that they struggle to keep up with consumer expectations, especially as technology advances. Additionally, 33 percent of retailers feel as though they are behind thanks to outdated technology.

Loyalty today is about more than points. Image credit: Neiman Marcus

Aligned brand values, flexible payment options and human interaction are the top interests driving consumers today, in that order.

Additional insight
As marketers look to overhaul their customer experience, many are just skimming the surface with superficial makeovers, according to a Forrester analyst.

In a keynote address at Forrester’s CX NYC forum in 2018, the researcher compared the difference between what brands are currently doing and what they need to be doing to decorating rather than renovating a house that needs structural work. More thorough overhauls that break the mold and put the customer at the center of all decisions have proven effective for brands (see story).

Brands across sectors are struggling to raise their standards for innovative customer experiences and enhance their offerings and services.

According to Forrester’s 2019 “U.S. Customer Experience Index,” the majority of the highest-performing brands remained stagnant from 2018 to 2019. Brands must do more to improve customer experiences, as well as reach the ever-growing number of consumers who make purchases based on a brand’s values (see story).

“The stakes are very high for retailers,” Ms. Wolfe said. “Most shoppers – 55 percent – say just one bad experience would stop them from returning to a brand, so it is crucial that retailers offer the best customer experience possible, not only to drive sales and loyalty, but differentiate from competitors in the current retail climate.”