Backdrop of economic pessimism forces UK consumers to re-think loyalty to brands

By Phil Singh 

Epsilon announced recently the UK results of the 2013 Consumer Loyalty Study in the report, Invest in Your Customers, and the UK Could be The Jewel in Your Retail Crown.

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The study revealed that only about a fifth of Britons (22%) feel strongly about their own or their family’s financial prospects, and over three quarters of the country’s consumers are experiencing low savings rates. This is in the face of a British economy that is struggling to recover from one of the worst recessions in recent history.

The survey also found that UK consumers are extremely cautious with their disposable income. More than half (57%) shop around for bargains, consciously searching for the best value, and only 15 per cent are prepared to pay a premium for luxury products.

The backdrop of uncertainty has provided many challenges for brands. The push to try and create loyal customers has left many brands scratching their heads after spending significant amounts of time and money on loyalty programmes with little or no return on investment. Consumers are seeing the advantages through discount cards, price reductions and coupons but there’s minimal, if any, gain for brands because customers do not necessarily remain loyal.

The study also reveals that the most loyal consumers can be found in the mid-income bracket, twice as many as high income earners in all sectors except travel. Ten per cent of the mid-income clothing shoppers gave the highest loyalty score compared to three per cent for higher earners. Similarly, in the grocery and financial services sectors, only a respective 15 and 14 per cent of respondents in the mid-income level considered themselves exceptionally loyal versus only eight and four per cent of high income consumers respectively.

Meanwhile, the high income group is found more self-reliant than the other income groups in gathering information that half of them (50%) trust the information on review websites to make their purchase decisions, whereas only 36% of the mid-income and 31% of low income consumers will rely on that channel. A consideration for retailers should be to utilise the positive public and social ratings of their product or service to create differentiation. It’s worth trying to add the key rating on the message or e-commerce site, and develop a retail offer for top ranking products and promote across touch points to improve click and purchase outcomes, or at least test for it.

For more recommendations on helping improve customer loyalty and other findings from the study, download the full UK report on www.epsilon.com/loyalty2013 .

This global study of seven major Asia Pacific and European markets aimed to establish the state of consumer expectations and loyalty in the regions. The markets surveyed included Australia, China, India, and Japan in Asia Pacific, and France, Germany, and the UK in Europe.

About this study

Epsilon engaged Ipsos, one of the world’s leading independent research organisations, to conduct the 2013 Consumer Loyalty research to study seven major Asian and European markets to establish the state of consumer expectations and loyalty. The markets surveyed include Australia, China, India and Japan in Asia Pacific, and France, Germany and the UK in Europe. The research was conducted online or face-to-face as appropriate during the third quarter of 2012 in Asia Pacific and in January 2013 in Europe with a total of more than 2800 consumers. For the UK, there are 419 respondents mapped to the age and gender of the general population.

About Epsilon

Phil Singh is Vice President, Business Development for EMEA at Epsilon.

Epsilon is the global leader in delivering direct-to-customer connections that drive business performance. Epsilon’s integrated solutions leverage the power of rich transactional and demographic marketing data, strategic insights, analytics, award-winning creative and robust digital and database marketing technologies to connect brands with consumers both online and offline, increasing engagement to generate measurable marketing outcomes. Founded in 1969, Epsilon works with over 2,000 global clients and employs over 4,800 associates in more than 60 offices worldwide. Epsilon is an Alliance Data company.

Epsilon International operates under Epsilon in U.K., France, Germany, Ireland, Australia, China, Hong Kong, India, Japan and Singapore.

For information about Epsilon in the UK follow us on Twitter at https://twitter.com/EpsilonUK  or LinkedIn at http://www.linkedin.com/company/epsilon .

 

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