Shoppers have “zero tolerance” for poor retail

New research from payments provider Klarna has revealed that 40 percent
of shoppers say that just one bad experience would stop them from returning
to a brand, showing that it is a struggle for retailers to retain customer
loyalty as today’s shoppers increasingly have a “zero tolerance for a poor
retail experience”.

The research conducted by Censuswide, polled 2,000 UK consumers and over
250 retail decision, and revealed that a third (32 percent) of consumers
say shopping isn’t as fun as it used to be, with 36 percent feeling that
what shoppers today have gained in convenience, they’ve lost in

Shoppers are demanding more from retailers, with loyalty running much
deeper than a transaction or offer, and when it comes to what drives
disloyalty, a bad returns process (30 percent), and a drawn-out online
checkout without payment options (21 percent) rank much higher for shoppers
than retailers perceive them to be.

Retailers are recognising this shift, adds Klarna, and they are starting
to evolve the way they think about loyalty, with 41 percent of retailers
agreeing that loyalty is no longer solely driven by rewards and 76 percent
adding that they have to work harder than ever to retain customers, while
33 percent state that they are struggling to keep pace with consumer
expectations around experience, as they are being held back by outdated
tech (33 percent) and a short-term focus on sales (30 percent).

“Experience is the new loyalty” according to new research from

Whilst the traditional drivers of loyalty remain important, it is no
longer enough to only deliver value for money, quality products and a good
online user experience, with 40 percent of shoppers stating they want to
shop with brands whose values they align with, while 35 percent want human
engagement and 26 percent express a need for flexible payment options.

This is especially true of millennial and Gen Z shoppers, notes Klarna’s
research as they care less about value for money, and more about brand
image – 20 percent, compared to 13 percent of over 45 year olds and with
regards flexible payments – 30 percent, compared to 25 percent of over 35
year olds.

How can retailers keep pace? According to Klarna, forward-thinking
retailers need to invest in “newer” elements of experience – such as a
smooth online user experience, additional payment options, a curated
experience and brand content.

Luke Griffiths, managing director at Klarna UK said in a
statement: “Loyalty is no longer a ‘points’ programme. It’s clear that
consumers want to align themselves with brands who can offer them a deeper
connection and understand how they want to shop.

“Retailers need to be investing in the right drivers of loyalty for
their customers – whether that’s flexible payment options that fit with
their lifestyle or curated experiences that put the fun back into shopping.
As consumer expectations continue to grow and the role of experience
becomes increasingly important, getting this right will be vital to success
in a competitive retail market.”

Andy Mulcahy, strategy and insight director at IMRG added: “Shopper
confidence appears to be in a suppressed state and many retailers are under
pressure to enhance the customer experience they offer to keep ahead in a
tough environment. The problem is that ‘customer experience’ is a term that
can technically cover every aspect of a retailer’s proposition. Identifying
where to focus resource is a challenge. This research shows that
understanding the drivers of loyalty that will work for a specific retailer
is important for keeping ahead today.”

Image: courtesy of Klarna


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