Experience is the new loyalty, Klarna research

Shoppers increasingly have zero tolerance for poor retail offerings, according to research by payments venture Klarna.

It surveyed 2,000 UK consumers and over 250 retail decision makers. 40% of the former said just one bad experience would stop them returning to a brand. A third claimed that shopping wasn’t as fun as it used to be, with 36% feeling that what they have gained in convenience, they’ve lost in experience.

When it comes to what drives disloyalty, a bad returns process (30%), and a drawn out online checkout without payment options (21%) rank much higher for shoppers than retailers perceive them to be. 41% of retailers agree that loyalty is no longer solely driven by rewards and 76% say they have to work harder than ever to retain customers. But 33% are struggling to keep pace with changing consumer expectations around experience and are being held back by outdated tech (33%) and a short-term focus on sales (30%).

It is no longer enough to only deliver value for money, quality products and a good online UX. Shoppers today crave things like brand values they can align with (40%), human engagement (35%) and flexible payment options (26%). This is especially true of Millennial and Gen Z consumers.

Progress is being made, however. The top areas for investment over the next 12 months are a smooth online UX (39%), additional payment options (38%), a curated experience (37%) and brand content (34%). Luke Griffiths, Managing Director at Klarna UK, comments: “Loyalty is no longer a ‘points’ programme. It’s clear that consumers want to align themselves with brands who can offer them a deeper connection and understand how they want to shop".”

“Retailers need to be investing in the right drivers of loyalty for their customers - whether that’s flexible payment options that fit with their lifestyle or curated experiences that put the fun back into shopping. As consumer expectations continue to grow and the role of experience becomes increasingly important, getting this right will be vital to success in a competitive retail market.”