Brand loyalty is a reflection of a customer’s commitment to a relationship with a given retailer or service provider. But, of course, the pandemic changed everything about all our relationships. We quickly got used to holding everything and everyone at arm’s length – and for many customers, that included the brands they had once been loyal to.
Read on to discover the three principles of brand loyalty after COVID-19 shifted our buying behaviors (and one interesting exception to the rule.)
In food and beverage alone, online sales in 2020 saw a 125% increase over the previous year. Across all sectors, second quarter online sales surged 32%, with consumers spending $211.5 billion. McKinsey estimates that the general growth of eCommerce over the first three months of the pandemic was equivalent to ten years’ worth of growth under normal circumstances.
These are stunning statistics. And the biggest common denominator behind these purchases is convenience. When it’s no longer convenient to leave your house and wander the aisles of your go-to store, online shopping is the default alternative.
Big brands—ones with resources and manpower—were ahead of the game. Many had pre-existing apps and seamless eCommerce sites, coupled with pick-up and delivery options, that were well positioned to reach people despite the pandemic. Just look at Walmart’s third quarter online sales, which were up a jaw-dropping 79%.
Given a limited array of options against the shocking reality of COVID-19, people prioritized convenience. Baby boomers were the fastest growing demographic in eCommerce, being some of the last holdouts in the transition to online buying, sticking with in-person purchases until the pandemic all but forced them to change.
It’s important to note, however, that most of these trends driving convenience were already in the works, and even smaller brands were beginning to catch on. Customer service expert Shep Hyken says that many of the convenience options such as curbside delivery, touchless service, and more would have become more prominent in the next three to five years, even if the pandemic hadn’t happened.
Hand-in-hand with convenience is availability. The beginning of the pandemic saw people rush to the stores to hoard supplies—which inevitably caused supply chain shortages and breakdowns. Some brands managed to catch up with demand and patch any holes in their supply chain, but others are challenged by the supply-demand equation to this day.
Whereas convenience was driven at least partly by choice, availability forced the hand of many buyers. But they weren’t always disappointed by the alternatives. Being obligated to try new brands, even a store’s own private label products, was often a novelty and opened up new possibilities for customers who had subscribed for years to the mentality of “this is the way we’ve always done it.”
And now that they have, it’s likely many of the behaviors they adopted at the height of the crisis will stick around for the long run. Globally, 83% of customers who bought new brands in 2020 say they’ll buy from those brands again in the future.
COVID-19 meant tightened purse strings for many households, pushing more people to seek out products and services with more bang for their buck. Thus, a major driver of brand loyalty throughout the last year has been value.
Unsurprisingly, luxury brands saw a drastic drop in sales in 2020. But even with everyday brands, customers let frugality lead their way—the increase in spending on private-label store brands wasn’t just due to availability; it was also about value, with those generic brands saving a customer as much as 20-30% off equivalent name brand products. A recent report shows that at the crux of the crisis, 64% of consumers in the U.S. actively cut back their spending. If a brand couldn’t prove its value to a frugal customer, it more than likely experienced a drop in sales over the last year.
And once again, it’s likely some of these buying behaviors will stick beyond the pandemic—once consumers know their dollars can spread further—and usually without too much sacrifice to quality—few will go back to lower-value brands.
Despite the introduction of these three new motivators of brand loyalty after COVID-19 reshaped the market, customer experience still reigns supreme. Consumers do, after all, still have choices available to them. Even when a brand is convenient, available, and high-value, if the experience in the buying process is negative, customers will go elsewhere.
The same goes for customer care efforts post-purchase, whether it’s transactional interactions like account changes or payment options or more complex scenarios that requires escalations or specialized agents. Empathy, responsiveness, and a streamlined process still matter. Brand loyalty depends heavily upon customer experience, regardless of the impact of the pandemic.
We’ve written before about the changes in consumer behaviours and the impact on customer care – from fluctuations in arrival patterns to dynamic average handle times. When you take the impact to brand loyalty into consideration, it is more important than ever that your customer care program, whether in-house or outsourced, is founded on an ability to adapt. What worked in 2019 may not work in 2021 or 2022.
If you’re going to RFP in the next six months, challenge your prospective partners to highlight demonstrated capability to provide leadership and insight in a changing environment. Challenge their experience in adapting their processes to meet today’s consumers where they live: online, searching for value, availability, and convenience all wrapped up in a positive support experience that cements their loyalty.