How will brand loyalty change as the world goes digital?

Some brands are experts at fostering customer loyalty. They rely on a strong, unique product and follow it up with effective branding. There are many different aspects of branding which attract customers’ attention. The strategies and tactics most brands use have been polished over decades.

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But ideas about branding and how to encourage brand loyalty have changed. From pioneering consumer brands like Coca-Cola, through to the golden age of advertising and more recently the rise of online marketing. The overall trends is continuously moving towards changing the behaviour around social loyalty - which tries to embody loyalty as a holistic approach.

Each era has brought new ways of thinking because things are always changing.

Shopping trends

The digitalization of shopping is still a work in progress. It’s a process that’s been happening for a while now. But it doesn’t look like it will be slowing down any time soon. The pandemic has pushed more consumers online than ever before and research suggests that the switch will be permanent.

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Selling online has many benefits. It means retailers can save money on physical store space and other costs. They can also offer a more personalized shopping experience using customer data.

When all your products are shipped out of a warehouse, your website becomes the ‘storefront’.

At the same time, shopping online offers customers a much more convenient way to get the products they want. They can shop in an online store from the comfort of their sofa and have items delivered straight to their front door.

A new type of brand loyalty

As more and more customers shop online, our ideas about brand loyalty will also change. Many brands rely on the in-store shopping experience to foster loyal customers. It’s a cornerstone feature in many cases.

But as shopping continues to move online, what will replace the physical experience?

You might think online stores are a poor substitute for the real deal. While it’s true they can’t replace the physical touch, businesses now have lots of options to make the online shopping experience just as rewarding.

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Referral programs and loyalty programs are two of the most important tools for building customer loyalty online. While brand image is still the most important factor, referrals and loyalty programs help replace aspects of the in-store experience.

A business using referrals will...

• Attract higher quality leads
• Increase the likelihood of new customers becoming brand-loyal 
• Gain a better insight into what makes their customers tick
  

A business with a loyalty program will…

• Have more satisfied shoppers
• Increase revenue from their core customer base
• Be able to shift stock more effectively
  

Both of these strategies use rewards to show customers that they’re valued. Sometimes the reward will be a discount coupon or a free item.

But one of the most popular types of reward among all shoppers, regardless of age group, is points. Points have an arbitrary value which means customers can choose what to spend them on.

According to KPMG, 75% of consumers say they would switch brands for a better loyalty program.

This stat speaks for itself. The quality of a brand’s loyalty program (a big part of the online shopping experience) is enough to make or break a customer’s connection to that brand.