High Street Retailers Loyalty Improvement Influence on Customer Buying Behavior - Report Example

INFLUENCE OF HIGH STREET RETAILERS LOYALTY SCHEME IMPROVEMENT ON CONSUMER BUYING BEHAVIOR (PM206) (Insert (Insert submission) Contents Introduction 3 Improvements and strategies by high street retailers 3 Examples of high street Retailers and their techniques 5 Conclusion 6 Recommendation 7 References 7 Introduction One of the major challenges in business is the ability for companies particularly in the retail industry to nurture and retain their customers. (Anderson, L. N. 2007) The retail industry has endeavored to ensure that their customers are kept loyal throughout seasons irrespective of the dynamics in the market. (Johnson, J. C. 2013) This has necessitated a number of mechanisms that ensure that customers are nurtured and retained in the industry. In this paper, the study will examine the individual strategies that have been used by high street retailers. Further, individual companies will be isolated and their successes be examined to highlight on the shrewd practices in the industry. Similarly, discussion will be focused on the main objective of the study on the determination of whether the improvements that high street retailer has made customers loyal. Improvements and strategies by high street retailers There are a number of improvements and methods that companies have tried to adopt to ensure that their customers keep falling in the same pattern. One of these strategies is personalized offers. Using this strategy retailers always ensure that they have a base of customers including their data at their disposal. (Johnson, J. C. 2013) With this resource, high street retailers have always resorted to creating personalized offers rather than providing the customers with general packages as offers. Johnson, J. C. (2013) notes that retailers pick on special situations including the customers’ birthdays to ensure that offers they provide are tailor made or are responsive to the customers. Another method that the high street retailers have adopted is; the rewarding of “extra” loyalty. Retailers usually look after their highest value customers. The idea behind this concept is to ensure that they invest more on the customers with high spending power. This technique also enables the retailers to identify those customers who are frequent but yet have very low spending power. (Konrad, L. 2014) The reward that is given is thus directed towards a particular section of customers who will ensure that the retailers benefit more. The third way through which retailer have aspired to improve to ensure that they nurture and maintain customer loyalty is through daring to be different. High street retailers take their time to ensure that they study their competitors keenly particularly on what they offer. They therefore endeavor to ensure that they improve on what the competitors offer in terms of the offers they provide to the customers. Konrad, L. (2014) notes that the retailers invest in the study of the behaviors of the customers in terms of what the customers treat to be of high value. These might not necessarily be very expensive things but those with high value to the customers. Retailers ensure that they invest in exclusivity. They give the customers what they believe the customers would not find in any other place. Another important approach that the high street retailers use to ensure that the customers remain loyal to them is integration of their programs. One of the main challenges that most retailers face is the ability to ensure that they have customer schemes that may be able to work for them both online and offline, particular those with the ability to recognize the value of the customers and ensuring that they match the benefit they intend to apply on the customer with the value they have. (Konrad, L. 2014) Sometimes this forces the retailers to integrate activities that they have across channels. An example may be creation of online purchases or launching of apps that may facilitate the purchases by the customers. (Anderson, L. N. 2007) The last strategy that high street retailers have adopted to retain the customer loyalty is shouting about the offerings they have customers. Regardless of the sophistication of the loyalty offer a company has, it is still imperative to ensure that there is visibility so as to allow the customers know about the offer. (Anderson, L. N. 2007) High street retailers ensure that the schemes they have get promoted at every touch point of the customer including messaging of the customer, training of the staff, digital communication as well as engaging of the customers on the social media. Examples of high street Retailers and their techniques The first time loyalty scheme was introduced in the UK high street was 30 years ago. (Anderson, L. N. 2007), to date, several steps have been made by the retailers to ensure that retailers get comfortable in this new business environment. Konrad, L. (2014) underscores this by suggesting that the situation has also revealed the complexity of human being and the difficulty of pinning down their buying behavior considering that the concept of loyalty scheme depends on human emotions. In the long run, business has been drastically affected based on this concept. The big question that needs to be understood is how the major players in the loyalty schemes maintain their engagement with the customers. The case in point of big loyalty scheme players and the effect they have on the client is the nectar. Nectar is a loyalty circuit which is owned by loyalty leader globally, Aimia. The growth of this had ensured that Aima had obtained 14 partners from original 4 partners within a period of two years. (Konrad, L. 2014) The success of nectar has been attributed to the fact that the Aima has always focused on the customer data and the insight that the company obtain from such a data. The other loyalty scheme which has been used is the Tesco Clubcard. This program is grounded on the fact that the retailers combine creativity with insight as well as scale with value. (Konrad, L. 2014) This card is one of the players in the loyalty scheme and it has been noted that the key point of its success is because it places the understanding the communication with the customers as the main priority in the marketing strategy. The Clubcard holders have the opportunity to redeem their points at four times the value of the points they have. This ensures that customers remain loyal to the retailers. (Konrad, L. 2014) Other loyalty programmes that have been extensively used include orange (Part of EE) or Fun Finder, Boots Advantage Card, Moonsoon and Ikano, Game Reward Card, House of Fraser, IHG Priority Club Rewards Conclusion Adoption of loyalty scheme by high Street retailers and the continual changes that the retailers employ has created a paradigm shift in the manner in which business is done. Individuals who would rather make purchases in different places finds a compelling need to stay with the retailers, while they can at the same time obtain goods and services at low cost. This also makes it hard for entrant in business which further stiffens competition. In the long run proper and refined entrepreneurial thoughts are encourage. Consequently, customers tend o get better deals from the retailers considering that retailers would not want to lose the hard earned customers based. As a strategy to avert any possible fall out with the customers, high street retailers have managed to redefine their relationship with customers by making customer service seamless and customer-centered. Recommendation Customers should create their own consumer networks to avoid blind loyalty, which in the long run, would deny them otherwise better deals. There should also be regulation of the loyalty practices by the authority in place to ensure that customers are not lured into unsustainable loyalty as well as ensuring that there is fair trade between the high street retailers. References Anderson, L. N. (2007). Case study customer evaluations of interior design elements and marketing features in an upscale womens apparel boutique. Gainesville, Fla.: University of Florida. Johnson, J. C. (2013). Contemporary logistics (7th ed.). Upper Saddle River, NJ: Prentice Hall. Konrad, L. (2014). Exploring the Geographical Dimension in Loyalty Card data. New York: UOP. Read More