Webloyalty highlights rise of the unfaithful consumer

If all dissatisfied customers decided to ditch their current retailer of choice, the total annual defection cost would be £147.2 billion, according to new research from Webloyalty and GlobalData Retail involving 2,000 Brits. This is up from £120.6 billion two years ago.

This also found that 19% of consumers would jump ship if a retailer was deemed not to be a good corporate citizen, whether it be due to environmental issues, tax avoidance, staff welfare or other irresponsible practices.

Other highlights include:

Price moves from third place to first place as the number one driver of store choice, leapfrogging quality of products.
Staff rudeness (58%), significant price rises (50%) and poor-quality items (45%) are among the top reasons cited for defecting
The strongest loyalty is found with DIY stores (57% plan to continue using their main retailer) and the least is found in food and grocery (32%)

“Amidst the current challenging retail climate, retaining customer loyalty has never been more important. This research shows that shoppers have more choice and price transparency. As a result of this, they are increasingly fluid in their loyalty and they have little tolerance for poor service,” says Ben Stirling, MD, Webloyalty Northern Europe.

“It’s perhaps unsurprising that they’re motivated by price and quality but it’s interesting to see ethical considerations entering the fold too. Over the last year in particular, there’s been increased scrutiny on environmental issues, especially with the recent plastics debate, while issues with employee welfare and zero hours contracts have also been highly criticised. Consumers are becoming more conscious of fairness and sustainability, and retailers need to be aware of the real cost and impact of defections.”

Neil Saunders, Managing Director of GlobalData Retail, adds: “The rise of online shopping, along with Amazon’s online empire, has contributed to increasingly fragile customer loyalties. It’s interesting to see in this year’s report that the DIY sector boasts the strongest customer loyalty. This could be attributed to the fact that DIY retailers have yet to successfully transition to online sales as customers shopping for home improvement products value in-store consultancy – which they just can’t find online. While this might be good news for DIY, other industries are struggling and all retailers need to focus on ways to retain customer loyalties as a business imperative.”