Retailers could see a 5% boost to annual revenues by driving emotional engagement with consumers. That’s according to a new report from Capgemini’s Digital Transformation Institute, titled Loyalty Deciphered— How Emotions Drive Genuine Engagement.
The report, which surveyed more than 9,000 consumers and 500 executives, found that emotions have the strongest impact in boosting consumer loyalty. It also identified that, whereas 80% of executives feel their brand understands the needs and desires of their consumers, only 15% of the latter agree.
82% of consumers with high emotional engagement would always buy the brand they are loyal to when making purchasing decisions (compared to 38% with low emotional engagement). In addition, 81% of emotionally connected consumers will not only promote the brand among their family and friends, but they will also spend more too. 70% of those with a high emotional engagement spend up to twice as much with those brands. They want brands to be engaged and reciprocate their loyalty in two-way interactions (86%), but they also enjoy giving back to a brand (81%). Consumers also want differentiated shopping experiences both online (75%) and in-store (73%).
Kees Jacobs, Consumer Goods & Retail Lead, Insights & Data Global Practice at Capgemini, says: “Consumers are immune to transaction based loyalty programmes of the past, so a retailer’s engagement with consumers needs to shift from being transactional to more emotional and meaningful. Decoding human emotions will ensure that brands have a better understanding of their consumers leading to building deep-seeded engagement and long-term loyalty with them. With a potential revenue boost of 5% up for grabs, and weak emotional connections ready to be exploited by the competition, no retailer can afford to ignore this reality.”