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Online vs In-Store — How to Maintain Customer Loyalty as Shopping Returns to Normal – PerformanceIN

One wonders what the omnichannel pundits are considering during the COVID-19 era. 
How can a retailer offer a truly multi-channel experience with all the heavy health and safety restrictions in place, never mind customer loyalty?
Certain segm…

One wonders what the omnichannel pundits are considering during the COVID-19 era.  How can a retailer offer a truly multi-channel experience with all the heavy health and safety restrictions in place, never mind customer loyalty? Certain segments of society will always prefer 'real world' shopping versus online (research suggests this is the older generations, Generation X and the like). 

But let's look at each generation in turn, to see how loyalty can be maintained both online and offline:

Baby Boomers

Boomers, normally classed as those born between 1946 and 1964, appear to have the most affinity to shopping in-store.  In a recent survey by Loyalty One, 84% of Boomers expressed their preference to shop in-store. They have high expectations of customer service and are most likely to switch loyalties should they be dissatisfied with their experience in-store.  It's important to target this generation due to their increased life expectancy and spending power, and they are not necessarily the technophobes that some may believe. 

In a recent report by Yes Marketing 30% of Boomers indicated that convenience is their main brand loyalty driver. Therefore, making a store easy to navigate would help increase loyalty - the Amazon 'one click experience' turned offline in other words.  Other ways to appeal to Boomers could be offering in-store easy gifting, compounding the 'convenience' experience as well as clienteling: so in a women's fashion store having smart staple accessories at the checkout could help prompt not only additional basket value, but also improve customer satisfaction if they are overdue a gift to a loved one. 

Likewise, the experience online could be reflected with product promotions at checkout and increased cashback on higher value baskets, plus offers on the likes of Mumsnet or Gransnet. 

Generation X

Classified as those born between 1965 and 1980, this generation grew up with the advent of the internet.  Having lived through the boom and bust of the 80s, this generation tends to be a lot more conservative and will research their target products. In-store, they may gravitate to sales associates for second opinions on items.

According to an eMarketer study this group is known for their extreme brand loyalty and for trusted brands they are willing to pay a premium. Their main activities online include checking emails and banking transactions. Therefore personalised offers via targeted emails would help target this group for retailers, as would utilising email retargeting for 'abandoned carts'.

Being quite conservative, this group are likely to leave items in the basket whilst they shop around or research the item further.  Gen Xers are just as comfortable with traditional or online media. Stores should be used as showrooms with take home magazines featuring best-selling items blending in-store and online promotions.

As the purchase cycle is likely to be longer, they would appreciate the convenience of being able to mull over purchase decisions at home.  It is no wonder that NET-A-PORTER, whose main customer type fits within this age range, also launched a shoppable print magazine Porter, thus perfectly encapsulating the comfort and ease with which the Generation X customer shops. 

Millennials

Millennials, classed as those born between 1980 and 2000, are famed for being fickle and have been dubbed a superficial generation fuelled by their obsession with social media.  In a recent report from Accenture*, the following myth-busting findings came to light:

  • They practice 'showrooming' just like the Boomers and Xers, research/examine in-store but buy online
  • Many actually enjoy visiting stores especially if the retailer provides mobile instore coupon scanning availabilities
  • They can be loyal customers as long as they feel they have been treated correctly: 95% in the Accenture survey stated that coupons sent via email or post would influence their purchase decision
  • A retailer gaining 'likes' on social media does not equate to loyalty by those providing these likes, it is rather a transactional ploy to receive offers and coupons
  • A seamless end to end shopping experience is what Millennials truly crave, and critically they are influencing the shopping behaviours of their parents as the latter become more comfortable and familiar with online shopping

So, what are the ways to gain this commercially savvy generation's loyalty?

Clearly coupons that can be used instore and online would be an easy but margin eroding route if expected and provided regularly.  Friends and Family offers linked to basket value may be a more sensible option which still provides a saving; while speaking to the other generations in a millennial's family unit. And for in-store, perhaps a competition or engagement exercise on social leading to an enhanced offer instore could work. For example, the winner could receive X amount to spend in-store with their consent to publish a photo with their purchases on the retailers' social media channels.

All other competition participants could receive a gift with purchase available with in-store purchases. 

Generation Z

Gen Z classed as those born between 2000 and 2010, are leading a shopping evolution according to an article from Business Insider. Being motivated by price and always having something 'new' has led them to frequent resale and rental sites. As they are so driven by price and value, they tend not to be loyal to any brand or store.

Instead, they will choose brands that reflect their values and they appreciate transparency and authenticity.  For example, Aerie, a lifestyle brand, saw sales rise from this segment after they banned photo retouching on their ads from 2014.  It's an 'activist' generation growing up as they did amongst the rise of the "Me too" and BLM movements. 

So how can brands capture loyalty offline and online with this consumer? Offline having recycling hubs in-store as H&M do would be a great way of capturing return traffic. This tactic inevitably leads to further purchases.

Other reports indicate this generation actually sees offline shopping as an enjoyable social excursion. Brands should capitalise on this behaviour.  They 'live their lives' on social media and are very cause driven with inclusivity being a major value driver.

Therefore, running campaigns with charity affiliates like Easyfundraising and Giving Assistant would position a brand well. The latter has a headline takeover image on their homepage with the following very forceful message ' Together we stand with anti-racism nonprofits'. 

Summary

Retailers have a dichotomy on their hands with an activist generation on one end of the spectrum and an ageing but affluent demographic on the other.  Ultimately, a segmented approach towards capturing loyalty would be the most prudent to ensure different strategies are utilised per desired demographic, online and offline.

People are living longer so retailers must not forget the Boomers and the Xers with their higher disposable income, but at the same time, they need to consider their future consumers' - Millennials and Gen Z.

It's a broad and complex audience mix to engage but those brands that can reach all groups in the spectrum will profit in the long term.