NEWS21 December 2023

Customer loyalty holding up despite economic woes

Cost of Living FMCG News Trends UK

UK – Customer loyalty is being maintained in the cost-of-living crisis with 70% of retailers having maintained or increased loyal customer numbers, according to research from customer data company Dunnhumby.

person shopping in supermarket with a basket

In its report called The power of personalised loyalty, Dunnhumby said that more than half ( 53%) of companies were seeing an increase in take-up of loyalty schemes.

Meanwhile, 70% of customers were buying more private brand products than at the same time the previous year.

The research comprised a detailed review of approaches to loyalty being adopted by 24 major retailers across Europe, the Middle East, Africa, South America, North America and Asia-Pacific.

Additional insight was sourced from Dunnhumby’s international client leads, providing anecdotal commentary on both the retailers that they work with and their markets in which they operate.

The study also suggested that companies’ future plans are likely to be based on mobile apps and omnichannel marketing rather than technologies such as chatbots or augmented reality.

Tailored digital recommendations were the preferred option within personalisation strategies, with emerging technologies seeing little uptake.

Two of the biggest barriers to effective implementation in both areas were viewed as financial constraints and technical challenges.

Joint report author Samantha Sergeant, customer engagement and media global propositions manager at Dunnhumby, said: “What we saw throughout is that many are finding ways to thrive in economic conditions which remain challenging for all, by focusing fully on individual customers and their needs, and then adapting their offerings accordingly, irrespective of whether this involves ‘new’ technologies.”

Co-author Debora Franchim, Dunnhumby’s director of personalisation and customer engagement, added: “Loyalty is hard to win and easy to lose but despite tough times, most retailers have managed to keep their base of loyal customers, or even grow it.

“There’s always room for innovation if it’s done in a way which adds value – and where its impact can be measured. For now, at least, ‘tried and tested’ means focused on what delivers optimal value for your most loyal customers, seem to be what is working best. And in many cases, it’s clear a strong private brand proposition is also helping to drive success when it comes to loyalty.”