Report details four ways retailers build customer loyalty
There are four key elements that sustain a customer’s loyalty over the long term (and price is not one of them), according to the newest research from Synchrony Financial.
According to Synchrony Financial’s 2015 Customer Experience and Impact Study, which examines 27 elements of the shopping experience, four experiences stand out as most valued by customers and translate into greater spend and loyalty for retailers.
More than half of shoppers say they would pay a higher price for the customer experiences they value most, and 77% of shoppers would be more loyal to stores that provide their personal top three customer experiences. Of the 27 retail elements studied, four emerged as most valuable to consumers and indicate the importance of simplifying and easing the shopping experience.
The top four elements include:
1. Pick your own sale items ranked highest in the survey, with 42% of customers finding this a valuable shopping feature.
2. Hassle-free returns was noted by 41% of respondents as important, with favorite benefits such as no time limit, no need for a receipt and free postage on returns.
3. No coupons needed to always get the sale price is key for 40% of participants who automatically want the lowest price without having to clip or find discounts.
4. Earn points to redeem for extra savings is ranked by 33% of shoppers as an important benefit and may lead them to spend more with the retailer when rewards are easy to accumulate and redeem.
“Retailers that build lasting loyalty know their customer’s preferences and integrate these elements into the shopping experience,” said Toni White, chief marketing officer, Synchrony Financial. “This study reinforces the finding that purchase decisions are driven by positive, practical and personalized experiences, in addition to a compelling price/value equation.”
In addition to the four elements that matter most to survey respondents, aspects that contribute to the “best in-store experience” as described by shoppers in each retail category include:
Apparel stores: 73% will shop more often as a result of helpful, attentive associates; clothes they like and a variety of merchandise; and good value and prices.
Department stores: 62% of shoppers will visit more if there are helpful, courteous associates; value, affordability and good sales; and clothes they like in their size.
Mass merchants: 57% of customers want a one-stop shopping experience and good discounts, deals and prices; the merchandise they want; and to make one trip with products that are easy to find.
Certain experiences matter more than others to different shopper segments. The vast majority of millennials (89%) indicate they would be more loyal to retailers offering the benefits they want most. Millennials (69%) and Gen Xers (55%) are also more likely to pay more for the experiences they value.
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NRF: Chip-and-signature not cutting it with customers
While the financial industry is supporting the use of chip-and-signature cards to meet the upcoming Oct. 1 EMV mandate, consumers are less convinced.
According to a new survey released by the National Retail Federation (NRF), 62% of U.S. consumers believe new credit cards being issued by banks don’t go far enough to protect card data or prevent fraud.
“Consumers are worried that chip-and-signature cards really amount to chip-and-chance,” said NRF senior VP for government relations Mallory Duncan. “The chip cards are a step forward, but shoppers are concerned that they don’t go nearly far enough. Unless the new cards require the use of a PIN, they will only provide half the safeguards needed to stop increasingly sophisticated criminals.
Among the 2.035 U.S. adults surveyed, 62% said they prefer chip-and-PIN cards to cards that just use chip and signature, and 63% said chip-and-PIN cards provide more data security than those that don’t. Among millennials, the preference for PIN was even stronger, at 71% of those between the ages of 18 and 24 and 66% for those ages 25-34.
Contrary to some banks’ claim that consumers don’t want to have to remember a PIN, the survey found 83% of consumers who say a PIN is more secure would consider it worthwhile even if they had to remember a different number for each card.
The survey also found 71% of consumers with a credit card have at least one chip card in their wallets, but that only 43% of credit cards are chip cards since most consumers have more than one card. Only 47% of consumers with a chip card have used it in a chip reader.
Starting Oct. 1, banks will no longer be liable for payment card fraud costs if the card used is a chip card and the retailer does not have a chip card reader. Many retailers believe the liability shift is unfair because the chip reduces banks’ exposure to fraud, while the lack of a PIN leaves retailers exposed to fraud.
The new cards, which banks have been rolling out over the past year, use EMV technology – short for Europay MasterCard Visa – to store data on an encrypted computer microchip. But unlike most EMV cards used around the world, which include a PIN, most cards being issued in the U.S. use a signature to approve the transaction.
The NRF also believes that chip-and-signature cards do not prevent the misuse of lost or stolen cards, since thieves can forge a signature. In addition, a secret PIN protects against fraud even in cases where a criminal is able to circumvent the chip.
Study: Contactless mobile payment set to grow
NFC-enabled contactless mobile payments, such as those enabled by smartphone-based digital wallet services like Apple Pay and Android Pay, currently make up a tiny fraction of card transactions. However, a new study from Indian mobile solutions provider Mahindra Comviva suggests contactless mobile payments are set to grow quickly.
With the global growth of mobile POS systems, from 2015 to 2018, contactless mobile transactions have the potential to reach 4% to 5% of retail payments, with growth in transaction volume accelerating after 2020. Total sales of mobile POS hardware in 2014 amounted to around 10 million devices.
The study also indicates that cards will account for 273 billion global transactions at a combined value of $30 trillion by 2018.