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Factors Affecting Customer Loyalty & Increased Customer Brand Loyalty in 2020

By November 16, 2020 November 23rd, 2020 CCG Retail Marketing Blog

Our third annual Retail Customer Loyalty Study reveals how consumer shopping behavior and preferences have changed since 2020.

Couple Shopping with Masks On

Article Highlights

  • 39% of retail customers are considered Loyalists — up for the third consecutive year
  • The number of consumers who routinely shop around fell in 2020
  • Good value is a critical loyalty factor, but customer service also ranks in the top five
  • Understanding factors influencing customer loyalty can help your organization prioritize resources and guide customer retention efforts

Finally, some good news for retailers! Customer brand loyalty has notably improved in 2020, with more customers than ever reporting that they prefer to consistently shop with the same retailer rather than shop around. This is according to customer.com’s 2020 Retail Customer Loyalty Study. Here, we share highlights from the study, including a review of the factors influencing brand loyalty.

Want the full report? Download a free copy of the 2020 Retail Customer Loyalty Study.

Background on the 2020 Retail Customer Loyalty Study

To gather the 2020 customer loyalty statistics, our survey probed 1,041 consumers about their loyalty to retailers and which loyalty factors drive them to shop exclusively with any given brand. It addressed these critical questions:

  • When all things are equal, which factors drive customers 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 COVID-19 pandemic affected customer brand loyalty?
  • 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?
  • Which retailers make loyal customers out of customers whose style it is to shop around?

Customer Brand Loyalty Grows

Back to the good news. In our 2020 Retail Customer Loyalty Study, we found that 39% of customers prefer to consistently shop with the same retailer — up from 37% in 2019 and 35% in 2018. This is the shopper personality we’ve dubbed Loyalists, and their gain came at the expense of Roamers — consumers who routinely shop around before making a purchase. Roamer numbers dropped from 35% in 2018 and 33% in 2019, to 32% in 2020, supporting the concept that loyalty tendencies are growing.

With data collected on nearly 600 retailers, customers emphasized some of the big names you might expect: Walmart, Amazon and Target topped the list of retailers named most frequently as preferred shopping spots.

Factors Affecting Customer Loyalty

Looking across shopping personalities, we discovered specific factors that influence customer loyalty, driving consumers to shop exclusively with certain retailers. Understanding these loyalty factors can give you crucial insights into how to position your organization in relation to those global competitors like Walmart and Amazon, as well as in relation to direct competitors. It can help your organization determine how best to target and prioritize resources and budget. And, of course, it can give you important information to guide your customer retention and loyalty efforts.

According to the loyalty statistics from our study, the factors affecting 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 at a particular retailer as a status symbol.

In 2020, predictably, our customer loyalty study showed that good value, ease of making purchases, quality of products and lowest price, respectively, were cited as the most critical factors affecting customer loyalty to a retailer. However, when respondents were asked which factors would encourage them to select one retailer over another if these factors were identical, the respondents’ top answers uncovered greater detail on what was important to them.

In 2020, top loyalty factors — when price, product and access were considered equal — remained similar to factors listed in 2019. However, customer service rose to the top five listed factors, while easy to make returns dropped off the list. Interestingly, the factors that drive loyalty and engagement show variations across the three shopping personalities as well as across demographics.

Use Loyalty Statistics Across the Organization

One critical point that our customer loyalty study drives home is this: While retail loyalty programs influence retention, there are many other compelling factors driving customer devotion 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 of myriad business issues.

Building customer brand loyalty requires that you understand and act on those 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 people 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 driving customer loyalty, get a free download of customer.com’s 2020 Retail Customer Loyalty Study.

Digging into the “why behind the buy” and creating strategies to build and maintain customer loyalty is what we’ve been doing at CCG for the past 40 years. 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.

Sandra Gudat

Author Sandra Gudat

Sandra Gudat is CCG’s president & CEO. Considered a pioneer in the field of customer marketing, she has a diverse background in consulting, database marketing, advertising, retail and business management. She is a frequent speaker on customer loyalty marketing and developing customer-centric policies

More posts by Sandra Gudat

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