How personalised consumer experiences drive loyalty beyond price cuts

Navigate the recession with effective retail marketing strategies. Learn to retain customers and build loyalty in a volatile market.

Amid a cost of living crisis and recession, retail marketers face tough challenges in customer acquisition and engagement. They do not have the luxury of getting off on a technicality and must confront these realities head-on.

Consumer loyalty crisis unveiled

The DMA highlighted marketers’ struggles in boosting short-term sales during a period of low consumer demand in their report, ‘How to Win Back Customer and (re)Build Loyalty’. The report reveals that consumer receptivity to price promotions was at a five-year high in 2023, and so was their willingness to switch brands as soon as a better offer came along.

With always-on promotions comes an always-on consumer expectation that deals and offers should be readily available. Consequently, consumer loyalty is at an all-time low, and attempts to regain their interest with additional price reductions only exacerbated the problem. In 2023, 61% of consumers said they felt less loyal to brands these days — a massive 20% increase from 2022.

Loyalty beyond discounts

In 2024, retailers need a firm price-promotion exit strategy in place. Deals and offers must be combined with a focus on customer experience and brand-building activity to improve consumer loyalty. By combining these approaches, brands will create deeper emotional connections with their customers, reducing price sensitivity and decreasing the likelihood of them switching to competitors.

However, this is easier said than done. With traditional retail spaces in decline, three-quarters of UK consumers believe the high street has changed for the worse. How can brands create meaningful, personal connections with consumers on the path to purchase?

61% of consumers said they felt less loyal to brands these days — a massive 20% increase from 2022.

Customer experience over transactions

Physical experiences are still vital for showrooming, product trial and creating connections between brands and consumers. As an alternative to retail spaces, the DMA’s recently released Customer Engagement Future Trends 2024 reports that 57% of consumers would like to see brands sponsoring other venues, such as coffee shops and libraries, and 53% would like to see high street stores offering experiences beyond shopping (eg. showrooms, photoshoots, community experiences).

In 2024, expect an increase in co-working spaces within banks, coffee shops in book stores and experiential events in department stores. Additionally, expect more digital direct-to-consumer (D2C) brands dipping their toes in the real world, such as through pop-up stores.

Retail marketers aiming to boost customer engagement and minimise price sensitivity in 2024 should explore the value of crafting real-life experiences for consumers to engage with their brand.