Retailers Struggle to Reach and Keep Customers

Just 3.5% of shoppers think retailers' online advertising is effective, according to new research from the USA's National Retail Foundation (NRF). The study also reveals that customer loyalty is dwindling, and that, while shoppers want loyalty programs, they are not prepared to divulge personal information in return.

The findings are presented in the first report from the NRF's annual Retail Demand Insights series, co-developed with Adjoined Consulting and sponsored by software firm SAP. The report will be launched officially at the NRF's annual convention tomorrow.

Customer loyalty
Retailers are finding it harder than ever to maintain customer loyalty. The proportion of shoppers stating that they were long-term loyal customers dropped from 84% last year to 77%.

Many consumers are unwilling to share personal information as part of retailers' loyalty programs. While 90% were happy to share their name, just 61% wanted stores to know their street address, and less than half were willing to let retailers collect details of their past transactions. Only a minority of consumers would let retailers track their weight (14.4%), income (12.5%), or net worth (8.2%).

According to Kathy Mance, VP at NRF, 'retailers looking to create loyalty will need to walk a fine line between specialising their services to customers and invading their privacy'.

Styles of shopping
The survey found that consumers wanted multi-channel shopping. 70.2% use a combination of stores, catalogues and online shopping, while just 17.5% shop only in stores, and 2.9% are dedicated online-only shoppers.

Reaching consumers
Less than a third of consumers think retailers' TV ads are an effective way to attract new customers (31.7%). 17.7% say they are affected by word-of-mouth, while just 3.5% find online advertising effective. Other ineffective advertising choices include advertising before a movie (2.3%) product placement (1.8%), and radio ads (0.4%).

Gary Williams, Managing Officer of Research for Adjoined Consulting, believes that 'traditional advertising isn't going away anytime soon', but predicts that it is 'likely to morph into the integrated channel approach consumers already desire when making a purchase'.

A summary of the survey is at www.adjoined.com . The NRF's web site is at www.nrf.com and SAP's at www.sap.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.