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Binomial is an innovation consulting firm helping clients be disruption-ready
May 30, 2021
How has brand loyalty changed due to the pandemic and what can brands do to prevent losing their best customers?
Consumer shopping behaviour has changed quite dramatically (Figure 1, McKinsey) in several ways and one particular change should have brands paying attention – an increasing number of consumers are trying new brands.
Bazaarvoice reported 39% of consumers across 6 countries (the United Kingdom, Australia,Canada, France, Germany, and the United States) bought products from new brands in 2020, and 88% of those first-time purchasers indicated that they intend to continue buying these brands in the future.
There are two main reasons consumers purchase new brands during the pandemic — changes in their needs and shortages of certain products. On one hand, customers’ needs for certain products have lower demand than before. On the other, for products with increased demands, customers may also shift to new brands because of the shortage. For brands left behind, many of the customers might not return.
As consumer loyalty shifts, how might brands build brand loyalty?
Lockdowns have played a notable role in the wavering loyalty to brands. People have to stay at home for longer periods, causing a shift in their daily needs. Their shopping demands are more for household goods, and they have lower demands for go-out related products.
Accordingto a A&M Consumer and Retail Group Beauty Survey, 70% of consumers bought less makeup in 2020, and 18% stopped buying it altogether. Only 20% of respondents said their beauty routines remained unchanged. There’s no doubt that people have decreased needs for certain products and services, such as clothing, and it’s not practical to hard-sell these products during the pandemic. Beyond promotions and discounts, affected brands can offer more value and create emotional and memorable experiences to appeal to customers, enticing them to buy your products during the pandemic in spite of the lack of necessity and come back to you after the pandemic ends.
One way is to provide value that is considered meaningful, which works especially well during the pandemic. According to research from Edelman, 37% of consumers had started using a new brand because of the meaningful or compassionate way they have responded to the outbreak. For example, Sephora allowed customers to use their points to donate to charities such as National Black Justice Coalition (whichworks with the Black LGBTQ+ community), and Project Glimmer (which servesat-risk teenage girls).
Another beauty brand 100% Pure has also allowed customers to buy a “Hand sanitizer donation” for someone else in need (Figure 2), which is aligned with its mission to “strive to live with compassion, kindness and empathy". Inaddition, customers can choose whether 100% Pure donates 1 bowl of dog food or plants a tree as they complete an order.
In addition to providing positive social value, the pandemic has also exposed the need for brands to calm customer worries through online conversations. It’s time for brands to express positivity, inspiration, direction and care for customers’ wellbeing in these difficult and uncertain times.
British jewellery brand Astrid and Miyu connected with their customers through emails,which included positive mantras and feel-good playlists for stay-at-home days (Figure 3). In addition, they demonstrated care for young brands and startups during the uncertain times when it launched free mentorship scheme and provided grants for black-owned businesses and students in 2020, which was then extended to everyone in 2021 (Figure 4).
Showing care for your customer’s wellbeing as well as for young business development during the difficult times are good ways to impress and retain your customers despite their lower demand for your products during these times.
The lockdowns caused intermittent shortages of daily necessities, which forced consumers to try new brands when they couldn’t find their preferred brands. According to research by McKinsey, aside from value, convenience and availability became most often cited as top drivers of consumers’ decisions about where to shop. Kognitiv also reported that 69% of customers expect connected omnichannel experiences, and they want to know if they can still purchase from you.
Many more people choose to shop online during these times, it’s necessary for brands to offer a flexible and convenient return policy, and communicate your flexibility in different channels to show that you understand your customers and value their experiences. In fact, according to Statista, 40% of retail respondents reported that they have adjusted their return policies during the coronavirus (COVID-19) pandemic, with a further 27% of retailers considering changes to their existing policy.
Brand loyalty has changed due to the pandemic, and it can be hard to win back your customers when they are gone. During these uncertain times, regardless of whether your products face lower or higher demand than before, you should seize this opportunity to create and reinforce positive brand experiences. Retaining your customers helps your brand transition from survival to thriving. It’s time to rebuild your brand loyalty initiatives and thrive in these uncertain times.
Binomial is an innovation and creative consultancy. Get in touch to figure out how to convert your transactional customers into diehard fans.
