It’s almost Valentine’s Day and chocolates are definitely on the brain on February 14th! We had a chat with our customers, The Urban Chocolatier to see why they love using Loyalzoo to show their regulars some love

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January’s all about being healthy, getting fit and sharing the New Year love. We are definitely feeling all of those things from The Shrink Tank. Find out why here…
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Customer behaviour is changing – as customers and as consumers we are developing rapidly. The way we choose where to spend our money is changing, and this means our requirements to retailers are changing, too. It is no longer enough to have a physical presence or a big billboard. Read more

The big brands have deep pockets and domineering presence, and pair this with free parking and low prices it is hardly surprising that customer choose them.

But for the very reasons that make the big shops attractive, they also make themselves vulnerable to shopper-savviness. The big brands are clones of each other, meaning shoppers have little reason to choose one over the other. Brand loyalty at this scale is rare and this is why the big brands are constantly working to drive their shoppers back to them. Here is a quick look at some of the strategies employed:

Free parking – Hardly a groundbreaking strategy, but nevertheless important. The point is to make the choice as easy and effortless as possible for the customer. Looking for parking and paying for it adds friction.

Brand comparison – Price wars are raging and supermarkets spend almost as much time talking about their competitors as themselves, in a bid to show the customer that they are cheaper than so and so. Some will even print their competitor’s name on the receipt!

Time-limited discounts – Some of the big supermarkets will give you a voucher along with your receipt, often with a neat little saving on your next shop. But have you ever looked at this in detail? Notice the expiry date. This has not been chosen at random, but is carefully calculated by marketeers and analysts, and is usually set to just before a customer would ‘naturally’ do their next shop. The purpose is, of course, to drive the shopper back in sooner – increasing the frequency of their visits and therefore increasing their spend.

Complex loyalty cards – The big brands all have some sort of loyalty program where customers earn points for their spend. But have you noticed the rewards? A store voucher or discount, which is what you might expect, is sidelined by rewards at other, non-competitive businesses such as restaurant vouchers, cinema tickets and online shopping vouchers. All very tempting to consumers – who feel like they are getting a special treat just for doing their everyday shopping.

Together these strategies all work towards one goal; make the customer come back more often and spending more, each time. But you don’t have to be a big brand with deep pockets to take advantage. If you can’t offer free parking, can you be flexible with your opening hours? Be the easier option for customers. Once a customer has chosen you once, you have the opportunity to turn them into regulars by offering a competitive, enjoyable experience in store.

A recent survey* done by AXA Business Insurance have found that more than 60% of Britain’s shoppers have lasting relationships with their local stores and that they are much less loyal when it comes to their supermarket shopping.

But what makes local shops stand out? One in four answered that they like knowing the shop owners and the staff by name. They also responded that they like being able to order ‘the ususal’ in their local shops. Not all business sectors are treated equally though – the sectors we report the highest level of loyalty to are hairdressers, newsagents and butchers. It comes as no surprise that we are loyal to our hairdressers and butchers – the products and the service they provide are largely based on trust. As a bonus, shoppers appreciate the benefits independent shops bring to an area; over 70% say they think local shops adds to the character of a place, and almost 1 in 5 say the are prettier on the high street than the chains.

Another factor in our seeming preference for local shops is the nostalgia tied to high streets as they used to be – with a varied selection of specialist shops. These days high streets have a higher level of sameness; the same shops are found on every high street across the country.

An unsurprising 88% say they are not loyal to the supermarkets; price and convenience is the driving factor when they decide where to shop. 1 in 4 say they would change if a different store opened nearer to where they live or work – indicating location is an important factor for customers when choosing where to shop.

The survey also lists the top 10 businesses we are most loyal to;
1. Hairdresser
2. Newsagent
3. Butcher
4. Baker
5. Greengrocer
6. Florist
7. Shoe shop/Cobbler
8. Clothes store
9. Fishmonger
10. Book shop.

Interestingly the list consists only of specialist shops – big supermarkets combining clothes, furniture and groceries are nowhere to be seen despite their ‘all-in-one solution’ and, often, car friendly locations. It is an interesting contrast to the picture often presented in media, where we tend to see a focus on consumers being disloyal and focused only on price, largely influenced by online shopping.

Online shopping may be convenient and easy – but British consumers still seem to put their loyalty with their local shops, appreciating familiarity and what these shops bring to the community.

*See the original survey here.