Our sixth annual Retail Customer Brand Loyalty Study reveals how consumer shopping behaviors and preferences have changed since 2022.
- Retail customer loyalty has continued to hold steady in 2023 after rebounding in 2022, with more customers reporting that they prefer to consistently shop with the same retailer versus shopping around before making a purchase.
- While price is an important factor affecting customer loyalty, receiving a good value and ease in making purchases actually have greater impact for the majority of consumers.
- Understanding the factors that are important to customers with different shopping personalities can help retailers determine how best to prioritize resources and budget.
- Faced with economic uncertainty, more customers are indicating that their spending habits are now swinging closer to “changed drastically” over the past 12 months and are leaning toward “buying essentials only” versus “buying whatever I want.”
Earlier this year, we conducted customer loyalty research to discover new insights about factors affecting retail customer loyalty. It was a happy surprise to find that the 2023 customer.com Retail Customer Brand Loyalty Study showed loyalty is holding steady from 2022 levels after taking a step back in 2021.
In 2023, the percentage of Loyalists — consumers who consistently shop the same retailer — rose very slightly to 37.7%, up from 37.5% in 2022. Starting in 2018, retail consumer loyalty had been steadily growing, peaking in January 2020 at 39% — prior to the COVID-19 pandemic striking in force a few short months later.
On the other end of the spectrum, Roamers — the group of customers who indicate that they prefer to shop around before making a purchase — shrank from the all-time high of 36% in 2021 to 32% in 2023.
How else did customer brand loyalty shift since last year? Read on for more study highlights, including customer loyalty statistics and an overview of factors influencing brand loyalty
Want the full report? Download your free copy of the 2023 Retail Customer Brand Loyalty Study.
Background on the 2023 Retail Customer Brand Loyalty Study
Our 2023 customer loyalty research survey probed 1,046 consumers about their loyalty to retailers and the factors that influence brand loyalty. It addressed these critical questions:
- When all things are equal, which factors affect customer loyalty, driving people to shop exclusively with a particular retailer?
- Which factors are most important to “super loyal” customers versus consumers who always shop around?
- How has the pandemic and economic uncertainty affected customer brand loyalty and spending habits?
- Which factors influence a non-loyal customer to shop exclusively at a particular retailer — in other words, what would make them more loyal?
- Do consumers show tendencies to be more or less loyal based on demographics?
Customer Brand Loyalty Continues to Hold Steady in 2023
As we noted above, retail customer loyalty has continued to rebound in 2023, with Loyalists increasing to 37.7% in January 2023 versus 37.5% in January 2022. This is after dipping to 35% at the height of the pandemic in January 2021.
The study also collected data on more than 700 individual U.S. retailers representing every retail category. Walmart continued to top the list of retailers named most frequently as the one consumers prefer to shop exclusively. In fact, the mega-chain has steadily increased its lead over the next closest retailers — Amazon, Target and Kohl’s. Interestingly, the composition of the top 50 retailers remained relatively the same as in prior years.
What factors affect retail customer loyalty?
Looking across shopping personalities, we discovered specific factors that influence customer loyalty, driving consumers to shop exclusively with certain retailers. Understanding these brand loyalty factors can give you crucial insights into how to position your organization in relation to global competitors like Walmart and Amazon, as well as in relation to direct competitors.
Understanding customer loyalty factors can also help your organization determine how best to target and prioritize resources and budget. And, of course, they can give you important information to guide your customer retention and loyalty efforts.
According to the loyalty statistics from our study, the factors influencing customer loyalty among different shopping personalities are broad and encompass the entire retail enterprise. Loyalty factors listed by consumers ranged from the tangible, such as receiving incentives to shop, to the intangible, like trust or viewing shopping a particular retailer as a status symbol.
Our most recent study clearly demonstrates again this year that while lowest price is a factor that influences brand loyalty, receiving a good value, ease in making purchases, quality products and convenience actually have greater impact for the majority of consumers. In fact, in 2023, lowest price was fifth in our list of most frequently picked loyalty factors.
When asked which factors would encourage them to select one retailer over another if access, products and price were equal, the respondents’ top answers were not surprising and, for the most part, remained closely aligned with last year’s preferences. The importance of receive incentives to shop continues to remain in the top five. For the first time trust made its debut in the top five, ranking fourth with 36% of respondents citing it in 2023 versus 28% in 2022.
Interestingly, the factors that affect customer brand loyalty and drive engagement show variations across the three shopping personalities as well as across demographics. For instance, Loyalists are more likely than the norm to list status, VIP benefits and feel retailer is socially responsible as top factors affecting their loyalty. Roamers, though, are more likely to cite lowest price, incentives to shop and informative website as their top loyalty drivers.
Spending Habits Return to Normal
Our longitudinal customer loyalty research study is fielded in January each year. But when the pandemic hit, we felt compelled to begin gauging its impact on consumer spending habits. When we fielded our loyalty study in January of 2023, we were especially interested to see if current economic uncertainty would impact respondents’ spending habits.
After seeing consumer spending habits swinging back toward normal in January of 2022, this year’s study showed signs of change. We believe the uncertain economic environment is a primary reason that overall scores have started to swing toward my spending has changed drastically and buying only essentials for the previous 12 months. Only time will tell how much spending habits will change again if inflation continues to increase.
We saw some specific changes within different shopping personalities. For instance, when asked How have your spending habits changed over the past year, Roamers responded that their spending has moved toward changed drastically — versus in 2022, when they were more likely to respond that their spending has not changed at all. Loyalists were more likely to indicate that they preferred to shop physical stores over shopping online.
The study also revealed notable variances from different demographic groups. For example, respondents aged 18 to 24 were more likely to report their spending had changed drastically this past year. Respondents aged 35 to 54 were most likely to indicate they are leaning more toward buying essentials online. And respondents aged 55 and older were more likely to indicate a preference for physical stores over shopping online.
Factors Affecting Customer Loyalty Matter to the Entire Organization
One critical point that our retail customer loyalty study drives home is this: While loyalty programs influence customer retention, there are many other compelling factors that affect customer brand loyalty to particular stores.
Much to the dismay of retail organizations struggling with customer retention, loyalty programs alone cannot fix sales and traffic issues related to a poor product offering, customer experience or any other countless business issues.
So, how do you build customer brand loyalty in retail? You must understand and act on influential loyalty factors in a way that will resonate with all shopping personalities. This requires enterprise-wide support from all aspects of your business — from customer-facing personnel and technologies to the back-office staff and processes that support them. A broad-based effort like this is absolutely key to meeting your retail loyalty and retention goals.
For deeper insights and year-over-year comparisons on the factors influencing customer loyalty, get a free download of customer.com’s 2023 Retail Customer Brand Loyalty Study.
Digging into shopping behavior insights and creating strategies to build and maintain customer loyalty is what we’ve been doing at CCG for the past four decades. Learn more about the retail marketing solutions we offer and how our retail marketing consultants can help you reach your goals. Schedule a free consultation today or call us at 303.986.3000.