As it did with nearly every aspect of retailing, COVID-19 challenged many of the traditional pillars supporting customer loyalty. Even essential retailers that were permitted to keep stores open had to ramp up ecommerce capabilities, curbside pickup and contactless BOPIS offerings in order to stay connected to their customers. And while online merchants welcomed the surge of new shoppers, many — including industry giant Amazon — struggled to keep items in-stock and deliver on fulfillment promises. These retailers got a customer acquisition windfall, but their challenge was, and remains, retaining these new shoppers as we move into the next normal.
This fourth annual Retail TouchPoints Customer Loyalty Benchmark Report details the challenges brought on by the pandemic, but also some silver linings for the industry. Key findings include
- The growth of new acquisition tools such as text/messenger program outreach (used by 30% of retailers) and declines in the use of traditional media (down to 29% from 41% in 2020);
- The emergence of free returns as a customer retention tool, used by 42% of retailers; and
- Downward shifts in the percentage of revenue generated by retailers’ loyalty program members — perhaps from the flood of new, non-member customers shaken loose from their normal shopping habits —indicating that building up these programs’ membership should be a high priority for retailers.