British consumers are more disloyal than ever before to the retailers they use, according to new research from retail specialist Verdict Consulting. Loyalty rates in 2008 declined at its sharpest rate for the past 10 years, with over 22 per cent of shoppers saying they are dissatisfied with the store they do most of their shopping at.
“In the current economic environment it’s critical for retailers to hang onto every customer they’ve got – no one can afford to lose business,” says Neil Saunders, consulting director at Verdict. “Such a low rate of loyalty demonstrates the extent to which people are shopping around and are increasingly willing to punish retailers that don’t meet their expectations. It should act as a wake-up call that retailers need to become better at meeting the needs of their customers.”
While the credit crunch, which has made consumers more inclined to shop around for bargains, is partly to blame for the increase in disloyalty, it is not the whole story. An increase in the choice of where consumers can shop has also driven the long-term decline. The proliferation of new, often international, retailer entrants, combined with an extensive selection of internet retailers, has made it easier than ever before for shoppers to switch their allegiance.
Says Saunders: “As competition has intensified, it has become increasingly difficult to hold onto customers and retailers now need to work harder than ever before to retain shoppers.”
