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Driving Brand Loyalty in an E-Commerce Retail Environment

Customer loyalty is all about relationships. Businesses that develop and nurture connections with customers are more likely to maintain those bonds. Brick-and-mortar retailers have the advantage of face-to-face interactions while e-commerce businesses must work harder and smarter to maintain the same brand loyalty.

Research shows that retailers who keep their returning customers satisfied reap the rewards. A mere 5% increase in customer retention can boost company profits by 25%, according to Fred Reichheld, a customer and employee loyalty expert from Bain & Company.

“Return customers tend to buy more from a company over time,” Reichheld said. “As they do, your operating costs to serve them decline. What’s more, return customers refer others to your company. And they’ll often pay a premium to continue to do business with you rather than switch to a competitor with whom they’re neither familiar nor comfortable.”

Here are four suggestions for boosting and maintaining e-commerce brand loyalty:

  • Expand customer touchpoints
    Customer touchpoints are vital to online commerce as they drive satisfaction and loyalty. Digital touchpoints such as social media, ratings and reviews, and targeted microsites create a bond between the customer and the company before a sale.

    Packaging and the product inside are crucial touchpoints for sealing the bond with the consumer after each transaction, and poly bags are proving particularly effective.

    “Companies are starting to recognize highly decorated poly mailers as an effective way to communicate to their prime audience,” says Bruce Carter, President of Great American Packaging.

  • Focus on packaging and product delivery
    Packaging is a lost opportunity touchpoint missed by so many e-commerce companies. As a three-dimensional extension of a company’s website, packaging sets the stage for the consumer’s first tangible experience with the business. It is an opportunity for retailers to build excitement and solidify the purchase. Most importantly, it is a prime opportunity to increase loyalty leading to higher repurchase rates.

    A study by L.E.K., a global strategy consulting firm, found that 90 percent of brand owners said packaging is vital to their success. Business owners find it so important that 75% of those surveyed anticipate increased spending on packaging over their 2018 budget.

  • Put social media to work
    Social media can make or break a brand. Visually driven platforms have changed the way brands are perceived and information is shared. Images of renowned actors, singers or athletes wearing a product can drive sales exponentially. Lesser known influencers have also become vital to marketing products. Unboxing events shared online help to craft a brand’s narrative and drive customer loyalty.

    A growing number of retailers are using creative and dazzling packaging to embrace the Instagram Effect, making products share-worthy. The online retail discussion forum RetailWire said the key to going viral is using packaging that is instantly recognizable (fun, flashy and bold), useful (with a dual purpose) and protective.

  • Use real-time customer analytics to target consumers
    Customer analytics allow companies to create personalization at scale – a targeted approach that gives customers more of what they want. Through fine-tuned algorithms, companies provide product recommendations and insights to customers that increase sales and loyalty.

Overall, research shows that customers who feel an emotional connection to a brand are willing to spend more and shop frequently. “Customers expect personalized experiences and premium loyalty programs that drive relationships. For businesses, the key is to identify the drivers of brand loyalty,” said Travis Montaque, the founder and CEO of Emogi, a content engine for communication platforms.

Retailers must prioritize customer satisfaction and loyalty to remain a key player in the ever-changing world of e-commerce.