Despite spending billions each year on loyalty programs and initiatives, retailers are struggling to effectively use their data to differentiate the customer experience and retain sales. This is one of the findings from an EY survey of 130 C-suite-level retail executives from North America, Europe and Asia, that reveals the challenges retailers face in today’s disrupted environment.
While the majority of retail leaders surveyed 87 per cent said a loyalty strategy is critical to their business success, just 27 per cent are confident that their current loyalty initiatives have a positive effect. Moreover, only 5 per cent of retailers think that their customers are loyal.
Partner and National Leader, Retail and Consumer Products, EY, Pinakiranjan Mishra says: “The relationship with the consumer has become increasingly transactional. With consumer expectations changing at a rapid pace in India, retailers need to create loyalty to drive business results and achieve return on investment with accuracy. Few retailers are fully embedding loyalty across core operations and customer touch points. Companies in India need to carefully monitor loyalty program metrics, retention rates, analytics and targeted marketing campaign outcomes to see the true value for loyalty programs and thereby, meet customer expectations at every turn.”
Executives believe there is much work to be done with few having real confidence in their own capabilities to embrace new technologies that might unlock loyal customers. The survey found that just 19 per cent of retailers are able to leverage their data and systems to understand individual customer needs; only 35 per cent can capture real-time insights frequently; and a mere 30 per cent have the ability to use technology to personalize the offer and experience for a customer every time.
Executive Director, Retail Customer Experience & Loyalty, EY, Patrick Moriarty says: “Legacy methods of creating and maintaining brand loyalty are failing. Many retailers are capturing data, but struggling to generate and activate insights in ways that help them stay relevant. Driving personalized offers, capturing real-time insights, understanding individualized customer needs and maintaining their trust are all key for success.”