Over a third of US consumers no longer loyal to their local department store
February 14 2023, Indianapolis, USA – Department stores won’t be feeling the love this Valentine’s Day as an emerging ‘cost of loyalty’ crisis diminishes their customer base, suggests research from omnichannel customer engagement platform SAP Emarsys.
The figures suggest a noticeable decline in customer loyalty, with over a third (34%) of department store shoppers less loyal than they were before the cost-of-living crisis. A much smaller dip in loyalty was seen among those who shop with independent stores (22%), e-commerce sites (20%), or pre-loved/charity retailers (7%). *
This ‘cost of loyalty’ crisis is expected to impact department stores on Valentine’s Day, with many shoppers putting bargains ahead of brand loyalty. One in three US consumers (31%) plan to limit their Valentine’s spending to less than £50 due to the crisis. **
This shift reflects a wider pragmatism from shoppers, with 60% changing their loyalties in the last 12 months. More than a sixth (17%) say that they “can no longer afford to be loyal”. *
“From fancy chocolates to the perfume counter, department stores have been a staple of the American Valentine’s Day experience.” commented Meghann York, Global Head of Product Marketing, Emarsys. “Now, in the face of a ‘cost of loyalty’ crisis, department stores need to adapt their strategies to keep customers coming back time and time again.”
“The personal service of the department store isn’t going anywhere, but physical retail is a manifestation of consumers’ digital lives. The level of personalization expected both in-store and online demands an omnichannel strategy — meeting customers via the places, channels, and devices that are right for them results in stronger customer loyalty.”
Brands that sell digitally are now adopting elements of the department store experience. Store experiences are now adopting online personalization by reimagining the bespoke experiences once exclusive to brick-and-mortar department stores.
For example, cosmetics subscription service Beauty Pie has worked with Emarsys to take the personalized department store experience at the traditional makeup desk experience online with a virtual consultation service. Features like the digital assessment of your skin type to find suitable products reimagine the conventional experience, mirroring in-store activations through the online journey.
“Whether you’re brick-and-mortar, entirely digital, or a mix of the two, it’s the customer experience that consumers will remember – especially on holidays like Valentine’s Day that inspire sentimental purchases,” continued York. “Ruthlessly prioritizing loyal customers, and delivering the best experiences across any channel, will help shoppers associate that emotional attachment with department stores in 2023.”