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Profiling customer loyalty across UK retail sectors

We recently conducted research with over 1200 UK shoppers to better understand customer loyalty across UK retail sectors. Our findings revealed the challenges faced by fashion and food service retailers in particular. We become increasingly disloyal the more experiential the shopping experience becomes. For example, the proportion of people who are core shoppers (i.e. they have a specific retailer with whom they do the majority of their shopping in a given sector) is significantly higher when it comes to buying groceries than when it comes to eating out. By our very nature we're more likely to shop around when buying clothes or eating out, so the core shoppers that do exist need to be looked after even more carefully than those in other sectors. Therefore fashion and food service retailers really need to identify what attributes of the shopping experience they need to excel at in order to maintain and grow the proportion of core shoppers they have.

customer loyalty across uk retail sectors
customer loyalty across uk retail sectors
  • Grocery: a frequent, necessary and relatively dull experience. It's advantageous to go to where we know and just get it done. Hence the high proportion of core shopping.
  • Beauty and Well-being: a less frequent purchase than grocery, but certain items need to be replenished regularly, so it is easier to buy them from retailers we know and trust. Other less regular missions may drive us to other retailers and decrease our loyalty e.g. needing to gain specialist advice on a new product or gift.
  • Fashion: can be a regular purchase but it is more 'wants' than 'needs'-driven. Clothes shopping is a pastime for some, who may not even come away with any product. There are lots of shops to choose from, lots of markdowns and very few retailers with loyalty programmes in place. This drives a lot of deal-seeking and a lower level of loyalty.
  • Food service: we like to try new places, and have new experiences on the occasions we do go out. Again there are very few restaurants, pubs or fast-food outlets which have loyalty rewards in place. Those that do, often don’t reward visiting the same place e.g. Tastecard, a coalition scheme offering discounts in participating restaurants to fee-paying cardholders.

Customer loyalty across UK retail sectors - by gender and age

The following sections depict a series of charts that show how certain gender age groups are more likely to be core shoppers than others. The greater the index is above 100 the more likely that particularly gender age group is to be a core, loyal shopper to a particular retailer.

Grocery retailing

UK grocery retail loyalty index
UK grocery retail loyalty index

Grocery has the largest proportion of loyal customers and there aren't any significant differences in the type of person who is more likely to be loyal than others. The only difference of note, is that men in their 30s are more likely to shop around than women in their 30s.

Given women still do the majority of shopping it is important to win their loyalty in their 30s. Grocers have focussed on young mothers for a long time and this is a key segment. Holding on to these shoppers as they age is just as important though.

Fashion retailing

UK fashion retail loyalty index
UK fashion retail loyalty index

Core shopping in fashion is more likely to occur at both ends of the age spectrum among male shoppers. Both younger and older men are more likely to be loyal, choosing to stick to places they know. Fashion retailers who are targeting middle-aged men, would be wise to build a retention strategy for male shoppers in their 30s. This will retain their custom when they get into their 40s, a time when their disposable income is more likely to increase and they’re more likely to shop around.

Women become gradually less loyal as the older they get. Fashion retailers targeting an older, perhaps more affluent female shopper will have to work harder to win the loyalty of these customers.

Beauty and well-being retailing

UK beauty well-being loyalty
UK beauty well-being loyalty

Women are more loyal than men to the retailers they shop beauty and well-being products. Women hit their core shopping peak in their 30s. It then decreases into their 50s, after which it increases again when they’re over 60.

This poses some interesting challenges for the beauty and well-being retailer. How should they position themselves to cater for an ageing customer with evolving beauty needs, especially around skincare? Retailers like Boots have done a great job at engaging the female shopper across life stages. This strengthens Boots dominance of the market, especially with an ageing population and might be food for thought for Superdrug and their customer strategy.

Food service retailing

UK foodservice loyalty
UK foodservice loyalty

While customers are less loyal when eating out (only 37% are core shoppers - see the first chart above) than shopping in beauty, fashion or grocery, those who are loyal, are more likely to be men aged up to 60. Men are, by and large, creatures of habit, returning to the same place to eat and drink. Whereas women are more adventurous when it comes to eating out, especially the younger woman. However tastes change after 60, when men are more likely to branch out and women to stick to places they like.

Food service businesses should recognise that where loyalty exists among men, it begins to diminish when men reach 50, having peaked in their 40s. Developing a strategy to retain customers aged 50 and over is likely to pay dividends. This will require food service businesses to identify which aspects of the customer experience are the most important to their core male customers in their late 40s and develop a strategy to deliver against these.