Written by: Andrew Busby, Retail expert and influencer
Loyalty; have you ever stopped to think about what it actually means? The dictionary describes it as, “a strong feeling of support or allegiance”. So, it would be reasonable to assume that we are loyal to our families, to our loved ones, to our pets perhaps. But does loyalty extend any further than that? Could it be possible that our loyalty, in fact, extends far beyond those confines, perhaps subconsciously so?
Cast your mind back to the heady days BC (Before Covid). We used to go out, with no restrictions. We would go to the shops. We would socialise with other human beings. We used to travel freely. All seems a little decadent now, doesn’t it?
Then what happened? We were confined, constrained, subject to rules and restrictions which meant that we didn’t do all those things; we remained in our bunkers. And so, we did what humans do; we improved our bunkers; and we started ordering online like there was no tomorrow.
According to the Office for National Statistics, in February 2020, online sales accounted for 19.6% of all retail sales. By February 2021, that had leapt to 36.2%. To put that in perspective, it previously took thirteen years (2007 to 2020) to make the same percentage increase. That is the sheer enormous scale of the change in our consumer behaviour. But that’s not all.
Whilst we were spending more time in and improving our homes, we adapted, we became used to our new lifestyle, characterised by on-demand, curated, concierge and service led offerings. Our bespoke existence became our new normal, we had become inured to it. And with that, came new demands and expectations.
Covid has introduced one new trend on mass, working from home, but the rest, it has simply accelerated – at warp speed. Where once we expected a brand or a retailer to engage with us, now we positively demand it. Our relationship with brands has fundamentally and permanently shifted, it’s what I refer to as the “three E’s”:
If the time we spend online with a brand does not contain all three, then the chances are extremely high that we will pass and move on. For example, when it comes to ease in the check out flow, 55 Percent of shoppers will abandon if they have to re-enter their credit card or shipping information and experts estimate that conversions can be increased by a whopping 35.62 percent by implementing the right checkout optimization strategies. And even that doesn’t paint the full picture.
In a recent study undertaken by the Center For Generational Kinetics, 64% of Gen Z said that in just five years’ time, the internet will determine what they do on a daily basis. And in the same study, 70% believe that websites will know what you are looking for before you tell them and 66% believe that all websites will "talk" to each other. So, every site/app/appliance will present a personalised experience.
Customer behaviour is constantly changing and the key to creating this personalised customer experience is having a real understanding of customer needs, and how they evolve over time. Merchants today have limited understanding of their financial behaviour, so they struggle to truly meet the needs of their customers. As a result, their loyalty strategies don’t serve their purpose as they fail to incentivise shoppers with rewards they actually want.
One trend that has recently come to my attention is the heightened demand amongst modern customers to own and invest in cryptocurrencies such as Bitcoin. As an emerging asset class with attractive supply / demand dynamics and stronger adoption rates than the internet so far, today’s young shoppers are drawn to owning a piece of the future. Businesses need to be considering ways in which they can craft loyalty strategies to cater to this need. One company that lives and breathes this is Mode, a next generation payments and loyalty platform that incentivises users by rewarding them with cashback, paid in Bitcoin – interesting right?
“Businesses that will thrive in the decade to come are those who cater to the demand of the younger generation - the crypto trend, including Bitcoin is just one example. The younger generation is driving the bitcoin economy and 66% of millennials have more faith in cryptocurrency than the stock market. If modern shoppers are increasingly looking to hold BTC and their banking and investment habits are changing, retailers should be prepared to adopt loyalty strategies that cater for this trend. One way of doing this is by incentivising customers with cashback paid in Bitcoin, giving shoppers exactly what they want and truly incentivising them to return.” Rita Liu, CCO at Mode and former CEO of Alipay UK.
Mode has built what modern customers are truly demanding, a payments and loyalty platform that is truly driven by data, which offers its customers a seamless payment experience driven by the ecosystem of a mobile wallet. On top of this, Mode’s platform gives users exposure to digital assets, without the risk of investing. For businesses, this will boost loyalty by giving their shoppers something they truly want, as well as unlock a high value user base and tap into a young and forward looking audience who have acquired large amounts of wealth held in cryptocurrencies over the past few years.
In other words, it’s about truly understanding the evolution of your customers needs, and constantly weaving these concepts into your loyalty strategies.