Online, websites like Etsy provide an opportunity for smaller retailers and sole-traders to break out from beneath the likes of Amazon, but the world of retail is perhaps best described as one of competing monopolies. In the UK, Tesco, Sainsbury’s, and Morrisons dominate the London high street and represent the country’s only interests on Deloitte’s Global Powers of Retailing list. Tesco’s revenue is more than double that of Sainsbury’s.
Necessary Evil
This list of companies, which also has Marks & Spencer in the top 100, feels like an unchanging thing. The UK had many of the same big names in its shopping centres decades ago. And, while brands like C&A and BHS have disappeared, it nevertheless demonstrates how difficult it is to insert a new name into the public consciousness. Keeping it there is a different trick altogether.
Making matters worse is the fact that many classic ways of retaining customers are dying out. Efforts to inspire brand loyalty, for instance, have been in gradual decline for much of the past decade. Forbes, citing research from Verint Systems, indicated that two-thirds of customers drift from one brand to another for the sake of lower prices and better service. Convenience, rather than familiarity, is the new king.
While it’s true that a business gets nowhere without attracting new customers, keeping the old ones, a skill known in marketing circles as retention, is just as important. So, the idea that brand loyalty is falling seems paradoxical. If a company can’t keep its customers, it can’t survive. However, this revolving door style of retailing, where new clients inevitably leave, may be a necessary evil for the smaller store.
Reward Schemes
Very few businesses can compete with Amazon – but a lot of companies exist in the same niche. Sadly, scooping up the customers that can’t be served by Jeff Bezos’ goliath (or Walmart, Target, John Lewis, etc.) is a reality for even larger stores like Book Depository, which consistently matches its prices to Amazon – and then sells items for a single penny less. Fostering brand loyalty may be a more effective tactic than creative pricing though.
Things like the Nectar Card and Holland & Barrett’s Rewards for Life program serve as good examples of loyalty schemes but they can be slow to accumulate points. Online, rewards programs can be much more elaborate. For example, the online gambling website Casushi features a Loyalty Bar that rewards users with points just for playing. These points, explained at https://www.casushi.com/, can then be exchanged for extra goes on certain titles.
Marketing company Yotpo claims that 68% of people surveyed would join a loyalty scheme with a trusted brand. This establishes loyalty as a prerequisite for itself, which can be a tricky situation to work with. In any case, encouraging customers to stick with your brand has few downsides. Even uncompetitive pricing isn’t as much of a worry for people who simply enjoy the experience of shopping at a preferred store.
Brand loyalty, while in steep decline in some sectors, is still something that should be fostered wherever possible.
