The COVID-19 pandemic imposed two severe stress tests on retailers, according to Brand Keys 25th annual 2021 Customer Loyalty Engagement Index®, a national survey of 75,000-plus consumers conducted by the New York-based brand engagement and customer loyalty research consultancy. The survey found rigors created by the 2020 marketplace produced two loyalty challenges for retailers:
- to enhance brand-to-consumer emotional engagement (the result of effective marketing that results in customers behaving more positively toward the retailer); and
- to leverage brand values to meet customers’ expectations (a key dimension of customers’ brand belief systems, unconstrained customer desires, which increase on average 22 percent a year, with brands typically managing only a 7 percent increase, leaving a sizable gap between customer desires and brand promises).
This year, to graphically illustrate retail brand loyalty rankings, Brand Keys created a series of emotional engagement/expectation quadrant maps based on the two stress-test dynamics. The 2021 survey examined 94 categories and 855 brands. Retail brands (in 12 categories included: Apparel, Athletic Footwear, Department, Discount, Home Improvement, Natural Foods, Online, Online Shoes, Pharmacies, Price Clubs, Sporting Goods, Toys, and Shipping) representative of each of the quadrant values included:
Challenges to retail sector customer loyalty accelerated at an overwhelming speed in the wake of the coronavirus and economic crisis. First, retailers closed. Then they re-opened. Then retailers found they had to adapt operations to comply with health-and-safety regulations, which changed from locality-to-locality, while all the time meeting increased customer expectations.
In the retail sector, those expectations increase at a rate of 17 percent annually. Retailers, including online juggernauts, only keep up by 6 percent, leaving a big gap between what consumers desire and what retailers deliver. These included mask wearing; controlling the number of employees and customers in stores, and then controlling physical distancing; addressing the problems of contactless transactions; and introducing self-service options. Some retailers needed to learn how to deliver better e-commerce experiences. Retailers that were first to recognize — and meet — these pandemically fueled expectations secured customer loyalty.
In light of store closings, inventory problems, and supply chain breakdowns, purchase of “new” or “alternative” brands represents basic need, not a lack of customer loyalty. During pandemics, consumers will compromise, but they still maintain their expectations be met. Lack of availability or access doesn't denote a decline of retail brand loyalty. Being open and in-stock matters regarding sales, but loyal customers are six times more likely to stick with their favorite retailers through difficult times.
The 2021 Customer Loyalty Engagement Index (CLEI) confirms retail brands that are best able to meet consumers’ expectations and are capable of sustaining emotional relationships with customers always see enhanced loyalty, customer traffic, sales, and the profits that come with them.
A complete list of the CLEI’s 94 categories, and the brands exhibiting the highest loyalty focus, can be found here.
Robert Passikoff, Ph.D., is the founder and president of Brand Keys, Inc., a brand research consultancy.
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