The State of Brand Loyalty in the UK

In October 2019, Yotpo conducted a survey of 1,008 male and female consumers in the UK to better understand their sentiment about and approach to brand loyalty.

Respondent Breakdown by Age

• Gen Z  (18-24 yrs.) | 13.3% (134)
• Millennials  (25-34 yrs.) |  22.9% (231)
• Gen X (35-54 yrs.) |  45.3% (457)
• Baby Boomers (54+ yrs.) |  18.5% (186)

1. Brand loyalty is on the rise, and today’s shoppers largely consider themselves to be loyal to up to five brands.
2. Despite increasing brand loyalty, the threshold for winning over consumers is higher than ever, as customer expectations become more elaborate.
3. The best way to meet and exceed customer expectations as well as inspire long-term loyalty is by creating a tailored and innovative loyalty programme.

Choice may be at an all-time high, but consumers are increasingly drawn to brands they love. Eighty percent of shoppers say they are at least as or more brand loyal this year as compared to a year ago, with only 20% saying their brand loyalty is declining.

Show me the meaning of being loyal:

The rise of loyalty begs the question of what exactly brand loyalty amounts to in consumers’ eyes. If brands are looking at lifetime value, their customers are factoring in everything from how often they purchase, to how they feel, to the product, price, service, and more, before they consider themselves loyal to a particular brand. More than two thirds (67.2%) of survey respondents defined brand loyalty primarily as “buying from the same brand,” while about a third (34.6%) said brand loyalty is about emotional connection or “love.”

When respondents said “buying from the same brand” amounts to loyalty, by and large, they weren’t referring to just a couple of repeat purchases. In fact, 42.1% said that they need to make five or more purchases before considering themselves brand loyal.

What inspires brand loyalty?

It’s clear that consumers are increasingly open to brand loyalty, which they define in terms of emotional connection (“love”) and repeat purchasing, but what sparks the initial bonds of loyalty to a brand? For most respondents (77.3%), product was the top motivator, followed by price (59.3%), and service (28.1%).

With product trumping price, it’s important for brands to continuously seek feedback from customers to ensure their products are living up to changing expectations. This serves both to improve products over time and to develop a deeper bond with customers around what matters most to them.

Loyal shoppers think and act differently when it comes to the brands they love. They’re quicker to refer products to friends and family, even price-conscious shoppers are willing to spend more, and 58.5% are willing to join a brand’s loyalty programme.

The loyalty effect doesn’t stop there: 75% of shoppers are “somewhat likely” or “very likely” to buy from a brand recommended by someone they know. So, those recommendations from loyal customers are extremely effective when it comes to reaching and acquiring new, like-minded audiences.

The catch:

While loyal customers will go to great lengths for the brands they love, they’re very picky about who makes it on that list. More than half (56.9%) are loyal to a maximum of only five brands. To make it into the top five, today’s brands need to be both innovative and hyper-attentive to customer expectations.

The opportunity:

While making it into consumers’ hearts is a challenge, there’s also a serious opportunity for brands selling to the UK market: Customer loyalty is increasing overall, but online brands are not yet tapping into that loyalty — and that’s reflected in consumer behaviour. Only one fifth (20.3%) of shoppers polled said they are loyal to online brands. However, that number nearly doubles to 39.5% when you look only at consumers aged 18-24.

The opportunity for eCommerce brands to build loyalty is growing, particularly among younger consumers. In the following chapters, this report will explore exactly what today’s shoppers want when it comes to creating long-lasting loyalty.

With the opportunity to capture the hearts of online shoppers, and the challenge of becoming one of the select few brands your customers will feel loyal to — the only way to ensure you’re hitting the mark is by understanding exactly what shoppers expect of you.

It’s not all about the money:

Shoppers are looking for more than just a good deal. When asked what they want most from a brand’s loyalty programme aside from discounts and free shipping, nearly half of all respondents (44.2%) said gifts or swag. Other top choices included tailored offers and recommendations, early access to sales and new products, and more, demonstrating that shoppers are interested in non-transactional interactions with brands.

Where most loyalty programmes fall short:

Just as shoppers are looking for non-monetary rewards, they also want to earn loyalty points by taking actions other than making a purchase. Giving your customers the opportunity to earn points by following your social accounts, for example, will increase their interaction with your brand and keep you top of mind while helping them earn credit towards a future purchase — a win-win situation.

In addition to the lack of variety when it comes to earning points, shoppers also pointed to uninteresting rewards (33.1%), friction in redeeming rewards (26.7%), the inability to use a loyalty program both online and in-store (25.4%), or at third-party retailers (28.4%) as their main frustrations.

Across the board, shoppers are seeking out seamless experiences and more interactive, personalised, and interesting loyalty programmes. The brands that have been able to build long-lasting loyalty despite the abundance of choice in the current eCommerce landscape are the ones that are going beyond the classic “punch card” transactional programmes and treating loyalty as an extension of their customer experience.

This chapter will share three ways to get creative about loyalty and give shoppers what they’re looking for.

1) Offer value beyond price:

While price and convenience will always be a factor, when 44.2% of shoppers are looking for gifts and swag, 36.8% want to earn points in more ways than just a purchase, and 33.1% find rewards uninteresting — it’s clear that shoppers are looking for more engaging interactions with brands.

When building your loyalty programme, get creative about how shoppers can earn and redeem points. For example, offer points to shoppers who submit a photo. This not only gives them a new touchpoint with your brand, but also provides you with powerful visual social proof that you can display on your site or on social.

For redemptions, offer unique gifts that are personal to your brand fans. Brazil-inspired Sol de Janeiro gives their loyalty programme members the option to use points toward branded “Team Bum Bum” t-shirts and hats (after their signature product and scent), keeping things interesting while building brand affinity.

2) Omnichannel is the only way to go:

With more than a quarter of shoppers frustrated by their inability to use loyalty programmes both in-store and online, brands need to be wherever their customers are in order to succeed.

A study from IDC Retail Insights showed that running omnichannel strategies can result in a:

• 15-35% increase in average transaction size
• 5-10% increase in loyal customers’ profitability
• 30% higher lifetime value than customers using only one channel

Invest in a loyalty programme that integrates with your point-of-sale solution, so that customers who buy in-store can still accrue and redeem points online and vice versa.

3) Give your customers the VIP treatment:

Shoppers reported wanting early access to sales (38.3%) and new products (28.8%) — and adding these perks to your loyalty programme makes members feel like they belong to an exclusive club with exclusive benefits.

When you make a point of creating VIP-only experiences, your customers learn that joining your loyalty programme affords them higher status with your brand. Korean beauty brand Soko Glam does a great job at offering increasingly exciting perks as members move up in their tiered VIP program. Making these perks exclusive to your most loyal customers is key: With authenticity at the core of your strongest customer relationships, repeat buyers need to know that their loyalty means more than a one-time purchase.