NEW YORK: When it comes to engaging consumers effectively, retailers are too focused on transactional metrics, such as convenience and price, and should recognise the importance of personalised experiences and social influencers.
That is according to a new global survey of 13,000 consumers conducted by Oracle, the technology firm, which identified a gap between consumer and retailer expectations across several areas.
Its study, entitled Retail 2018: The Loyalty Divide, suggests retailers are “out of touch” with consumers, not least regarding their different perceptions about loyalty programs.
For example, 58% of retailers believe consumers are eager to sign up to every loyalty program, yet 50% of consumers are much more selective about what incentives they are prepared to join.
Significantly, another 58% of retailers believe their offers are mostly relevant, but that is a view shared by only a third (32%) of consumers.
“In our primary research, we have uncovered a disparity between consumer and retailer expectations. Retailers put significant focus on transactional activity metrics and less focus on emerging behavioural expressions of loyalty,” said Mike Webster, SVP and general manager at Oracle Retail and Hospitality.
“We found that retailers are overly confident in their ability to deliver relevant incentives and consumers are demanding more personalised engagement,” he added.
The survey findings, which also included responses from 500 operators in the retail, hotel and restaurant sectors, also suggested that retailers underestimate the impact of social influencers in discovering new brands or affirming purchases.
More than half (53%) of consumers are likely to research brands on social media before buying, the survey found, while 46% are likely to save ideas on social media about products or retailers.
In addition, 43% are likely to share photos of retail experiences or products on social media, while the same proportion (43%) are likely to follow influencers that post about favourite retail brands.
Consumers also place their trust in social influencers, with 41% agreeing that reviews on YouTube are more trustworthy than branded advertising or communications.
However, despite this trend, Oracle said that 28% of retailers only take into account measures of loyalty based on activities such as loyalty card membership or transaction frequency.
“Retailers need to take a critical eye at the culture of shoppers that only engage based on convenience and price,” Webster explained.
“Social influence brings an additional dynamic for retailers to navigate the loyalty paradigm as they reward brand advocacy and feed enthusiasts content to affirm their purchases,” he said.
Sourced from Oracle; additional content by WARC staff