It’s not new to hear that customer loyalty is important for a company and a brand. However, loyal customers can be hard to find, especially with only 15% of consumers reporting being loyal to one retailer for everyday purchases and an even worse 5% saying they’re loyal to a brand. With more than half of a retailer’s sales coming from loyal customers, increasing customer loyalty is a necessity for any business.
In a country where 42% of shoppers have trouble limiting their purchases, all is not lost for retailers though. When it comes to shopping, most people head to the store with a specific product or item in mind. Anything else that they purchase is an impulse buy. One study found that 40% of all purchases in the US are impulse buys! More impressively, $4.2 trillion was spent on impulse buys just in Q4 of 2010. Impulse purchases represent a huge opportunity for retailers to turn potential customers into loyal patrons.
So, who is actually making these impulse buys? 60% of women have made an impulse purchase in the past year and 55% of women between the ages of 45-54 make impulse buys online compared to only 38% of men. (Source)
When it comes to getting shoppers to actual make the impulse purchase, one study found that 88% of impulse buys happen because the item is on sale. Additionally, 55% of consumers report that they often or very often end up buying more than just the discounted product when they are drawn in by a sale. While retailers want to be cautious about training customers to wait for discounts, when it comes to incentivizing impulse purchases, discounts seem to be the way to go. To help promote these discounts, 39% of customers prefer receiving email promotions while 9% prefer social media. However, it should be noted that 63% of consumers like a Facebook page expecting a promotion. (Source)
Once a retailer has hooked a customer with a sale, they need to convert these customers into lifetime buyers. Retailers can’t just let this impulse purchase data sit in a data center somewhere; they need to find ways to leverage it to bring the customer back. This is why more and more of the industry is shifting to automatic rewards programs that can better reach customers when it’s most effective. Third-party companies have started to emerge that analyze transaction data to allow retailers to get a better, more complete view. With this, retailers can control what sort of rewards customers are shown based on how much they spend, how often they visit the store, where else they shop or a variety of other factors. With this, retailers can run campaigns aimed to hook new customers who have never visited or only visited once. They can offer different tiers of deals to ensure that their marketing dollars are being spent efficiently and are reaching exactly who they want to reach.
With nearly 70% of sales dependent on loyal customers, retailers quite literally cannot afford to miss an opportunity to turn an impulse buy into a repeat purchase.