MONDAY 24 JAN 2022 4:03 PM


Digital transformation consultancy, Kin + Carta, has worked with first-party customer data specialist, Edit, on a research report looking at the impact of Covid-19 on consumer brand loyalty. It reveals that 27.4% of consumers now show no brand loyalty, with e-commerce and finance businesses suffering the most.

The report, titled ‘The Loyalty Paradox’ surveyed 200 respondents across the UK and USA with questions focused on loyalty, personalisation, and customer experience across a range of sectors.

E-commerce brands were found to have the lowest level of brand loyalty, at just 6% of consumers. Rob McGowan, joint managing director at Edit, says, “These results suggest that while the e-commerce sector boomed during the pandemic, brands would be wise not to confuse habitual purchasing with perceived loyalty.”

Although finance brands experienced a low level of brand loyalty with just 9% of consumers, loyalty increased with the age and income of consumers. For those with an income of over £75k, 20% claimed loyalty with one finance brand.

The digital consumer journey is likely to drive the sharing of personal data, with 43% of respondents stating that ‘a discount code or incentive’ would persuade them to sign up to brand communications.

Other factors influencing consumer loyalty were the opportunity to access exclusive products or first purchasing ability for 25% of consumers. Gen Z were found to prioritise exclusivity more than other demographics, with 30% interested in ‘first opportunity to purchase.’

“Brands cannot rely on loyalty anymore. Brand affinity through emotional connection has weakened to be replaced by habitual ties based on lived and related experience with brands and retailers. Brands therefore need to ensure that they look at the individual customer, and how they interact with the business to understand their behaviours and encourage habitual purchasing," adds McGowan.

Operational and customer service communications was found to be the main factor leading to brand loyalty. The research showed that 34% of Gen Z, and 32% of millennials would be deterred from making another purchase if they could not contact customer services via their preferred method.

Karl Hampson, chief technology officer of Data & AI at Kin+Carta, says, “Our research shows that brands must not confuse repeat purchasing with "loyalty". Instead, they should balance repeat transactional activity with how engaged the customer is across all interactions.

Read the full report here.