Generating Loyalty in a Fickle World (Review Report)

Publication Date	December 2006
Publisher	Datamonitor
Product Type	Report
Pages	40
ISBN Number	not applicable
Product Code	DAT03942

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Summary

Introduction

Globalization, the Internet and low cost foreign travel have changed retailing to a point where strategically, retailers have little choice but to acknowledge that their key efforts have to revolve around managing existing loyal customers and attempting to influence un-loyal ones. However, Datamonitor believes that largely, efforts to influence both are one and the same.

Scope

The all round customer experience is the primary loyalty winner and keeper.
A new approach to 'infrastructure' is needed first.
'Information infrastructure' could be retail's 'killer app' for the late noughties.

Highlights

Datamonitor believes that in fact, addressing core retail infrastructure and processes will enable retailers to become more agile and flexible so as to become far better at influencing customers than a raft of low value reward points will ever do to make up for a poor shopping experience.

Challenges associated with improving relationships with suppliers and improving overall customer experience in order to positively influence loyalty are primarily one and the same; namely, an obvious need to foster an environment that is as focused as it can be on capturing and exploiting every single bit of information to the maximum degree.

Datamonitor believes that addressing the notion of an information-driven business supported by an infrastructure capable of capturing, making sense of and delivering the right information to the right places remains a key area for competitive differentiation, simply because there are so many areas of a retailers business that would benefit from it.

Reasons to Purchase

Appreciate that 'loyalty' is more than points.
Combine end-user opinion with our analysis of potential action points for retailers.

Content

Catalyst
Summary
Methodology
Executive Summary
- Introduction
- Retail challenges: generating loyalty in a fickle world (Market Focus)
- Retail strategies: generating loyalty in a fickle world (Strategy Focus)
- Retail Technologies: Customer and Supply Chain Analytics (Databook)
Retail Challenges: Generating Loyalty In A Fickle World (Market Focus)
- Summary
- Consumer loyalty is hard to generate, difficult to keep, yet rather more easily measured
- Cool products created the 'buy and evangelize' mentality
- 'Pot luck' plays a part, but clearly doesn't make understanding consumer sentiment any easier
- Brands tap into product-related communities, even when their product's relevance is tangential
- Measuring loyalty is perhaps easier than creating it
- Loyalty in the UK - A case study
- The 'difficult' 25-34 age group demographic is the hardest nut to crack
- The 25-34 group is cash rich, well informed and carries out shopping 'due diligence'
- 'Likes groups but is not easily herded', characterizes the shopping preferences of this group
- Loyalty schemes are being actively avoided, which makes Loyalty Marketing Programs difficult to tailor
- Not only are they being avoided, many consumers state that they 'don't work'
- The traditional loyalty drivers, plus a human element, attracts the 'difficult' groups
- Retailers face multiple challenges to generate and retain future loyalty
- Individual retail sectors are working hard in challenging conditions [1]
- Retailers can 'invest in loyalty' but matching brand, 'loyalty type' and supporting processes and IT is challenging
- Identifying a trend is one thing, riding it another, knowing when to stop is the hardest trick
- Data capture and exploitation has its limits - information 'cartels' could become 'the enemy'
- Retailers are not IT companies, nor necessarily loyalty strategists - finding the right supplier is paramount
- SEGOR is no fad, is worth pursuing but presents its own challenges
Retail Strategies: Generating Loyalty In A Fickle World (Strategy Focus)
- Summary
- The all round customer experience is the primary loyalty winner and keeper
- Knowing where to start is a challenge in itself
- Loyalty is best addressed via indirect actions
- A new approach to 'infrastructure' is needed first
- Hence, 'infrastructure' becomes 'information infrastructure'
- 'Information infrastucture' could be retail's 'killer app' for the late noughties
- Retailers need to 'stay big' when planning strategic improvements
- 'Business intelligence for retail' is the application with which to leverage an information centric infrastructure
Retail Technologies: Customer & Supply Chain Analytics (Databook)
- Introduction
- This databook provides readers with a statistical and graphical overview of the developing market for Customer Analytics and Supply Chain Analytics software solutions at a regional and country level.
- Definitions
- Global market for Customer analytics software 2005-2010
- Global customer analytics software market
- Regional markets for Customer analytics software 2005-2010
- Regional customer analytics software markets
- Global market for Supply chain analytics software 2005-2010
- Global supply chain analytics software market
- Regional markets for Supply chain analytics software 2005-2010
- Regional supply chain analytics software market
Appendix
Further reading
- Ask the analyst
List of Tables
- Table 1: How loyal are you to specific brands or stores in the following categories? (A maximum of two responses per row were allowed)
- Table 2: Factors likely to influence shoppers' loyalty to specific stores (survey conducted September 2006)
- Table 3: Data and technology definitions
- Table 4: Customer Analytics - global market 2005-2010
- Table 5: Customer Analytics - global market 2005-2010 by region
- Table 6: North American Customer Analytics SW market 2005-2010
- Table 7: EMEA Customer Analytics SW market 2005-2010
- Table 8: CALA Customer Analytics SW market 2005-2010
- Table 9: AP Customer Analytics SW market 2005-2010
- Table 10: Supply Chain Analytics SW - global market 2005-2010
- Table 11: Supply Chain Analytics SW - global market 2005-2010 by region
- Table 12: North American Supply Chain Analytics SW market 2005-2010
- Table 13: EMEA Supply Chain Analytics SW market 2005-2010
- Table 14: CALA Supply Chain Analytics SW market 2005-2010
- Table 15: AP Supply Chain Analytics SW market 2005-2010
List of Figures
- Figure 1: Breakdown by age of primary research survey carried out for this brief
- Figure 2: Do you belong to any 'loyalty schemes'? If so how many?
- Figure 3: Do loyalty schemes work? Do you spend more in these stores than you otherwise would?
- Figure 4: What might make you more inclined to shop in specific stores more often? (please rate 1-4 with 4 being 'most likely')
- Figure 5: Retail loyalty influencers in order of impact
- Figure 6: Building a business / IT led strategy - where to start
- Figure 7: A 1000ft view of IT in the Extended Retail Industry
- Figure 8: Input points for exploring an information infrastructure strategy
- Figure 9: Retail BI focal points during 'maturity' lifecycle stage
- Figure 10: Retail BI focal points during 'decline / overdrive' lifecycle stage
- Figure 11: Customer Analytics - global market 2005-2010
- Figure 12: Customer Analytics - global market 2005-2010 by region
- Figure 13: North American Customer Analytics SW market 2005-2010
- Figure 14: EMEA Customer Analytics SW market 2005-2010
- Figure 15: CALA Customer Analytics SW market 2005-2010
- Figure 16: AP Customer Analytics SW market 2005-2010
- Figure 17: Supply Chain Analytics SW - global market 2005-2010
- Figure 18: Supply Chain Analytics SW - global market 2005-2010 by region
- Figure 19: North American Supply Chain Analytics SW market 2005-2010
- Figure 20: EMEA Supply Chain Analytics SW market 2005-2010
- Figure 21: CALA Supply Chain Analytics SW market 2005-2010
- Figure 22: AP Supply Chain Analytics SW market 2005-2010