Oracle Retail Report Highlights Four Consumer Typologies and the Role of Emerging Generations and Technology in Creating More Meaningful Consumer Interactions
Oracle Industry Connect—New York, NY.—Apr 12, 2018—Oracle today announced the findings of a global study titled “Retail 2018: The Loyalty Divide” auditing consumer perceptions and brand realities of loyalty programs and influences. “Retail 2018: The Loyalty Divide” reveals that retailers are out of touch with consumers that demand more personalized experiences and discover brands and affirm purchase decisions through social influencers.
“In our primary research, we have uncovered a disparity between consumer and retailer expectations. Retailers put significant focus on transactional activity metrics and less focus on emerging behavioral expressions of loyalty. We found that retailers are overly confident in their ability to deliver relevant incentives and consumers are demanding more personalized engagement,” said Mike Webster, senior vice president and general manager, Oracle Retail and Hospitality. “Retailers need to take a critical eye at the culture of shoppers that only engage based on convenience and price. Social influence brings an additional dynamic for retailers to navigate the loyalty paradigm as they reward brand advocacy and feed enthusiasts content to affirm their purchases.”
The Oracle study was conducted in February 2018 among 13,000 consumers and 500 operators across retail, hotels and restaurants in five key regions: EMEA (France, Germany, UK and India), North America (USA), Latin America (Brazil and Mexico) and JAPAC (Australia and China).
While 58 percent of retailers believe that consumers are eager to sign up to every loyalty program, 50 percent of consumers are much more selective only signing up to select, relevant programs and 19 percent of consumers rarely joining loyalty programs. Relevancy of loyalty incentives also further highlights the divide between brands and consumers: 58 percent of retailers believe their offers are mostly relevant compared to 32 percent of consumers believing those brand offers are relevant. Retailers continue to underestimate the impact of social influencers with only 45 percent of brands collaborating with influencers while consumers are more likely to trust brands reviewed by YouTubers (48 percent) and brands mentioned on social media (45 percent).
Despite the great divide, the future of loyalty is promising with younger demographics having a higher propensity to join loyalty programs and note their loyalty is growing. However a majority of retailers have a skewed focus on measuring loyalty with intrinsic values like brand perception and purchase history.
Consumers have clearly indicated the necessity for retailer’s to have a strong social presence and the importance of social influencers in discovering new brands and affirming purchases.
For brands to remain relevant they need to create loyalty programs that recognize consumers as individuals with a level of service that goes beyond the traditional brand experience.
69 percent of consumers note personalized offers based on stated preferences as appealing
66 percent of consumers note personalized offers based on purchase history as appealing
58 percent of consumers note personalized content and communications as appealing
82 percent of consumers note store proximity is most important in driving loyalty
74 percent of consumers note immediate benefits are more appealing than accumulating points
72 percent of consumers note an effortless loyalty program with automatic offers is appealing
“Retailers are heavily invested. The future of loyalty will be a balancing act between consumers desire for more anonymity, or at least direct control of their data, and an expectation for meaningful personalization that is targeted and timely,” said Webster. “Oracle Retail is helping our customers defend the right to be forgotten and pivot to earn the right to be remembered. We believe the answer is a new approach to segmentation that integrates advanced algorithms and machine learning into the retail business process that govern planning, inventory and pricing.”
Both consumers and retailers recognize that technology has a key role in driving connection and convenience in loyalty programs. Retailers, however, need to walk a fine line between enabling deeper connections without being invasive.
Retail 2018: The Loyalty Divide uncovered four typologies of consumer behavior including: The Broadcaster who may flit between brands but shouts about their experiences good or bad; The Enthusiast an engaged retail brand follower who is loyal but not loud; The Lazy Loyal typically unengaged but tend to be loyal to brands because it’s easy to be; and, The Seeker who likes to shop around for the best value and holds little affinity to retail brands.
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About Oracle Retail
Oracle provides retailers with a complete, open, and integrated suite of best-of-breed business applications, cloud services, and hardware that are engineered to work together and empower commerce. Leading fashion, grocery, and specialty retailers use Oracle solutions to anticipate market changes, simplify operations and inspire authentic brand interactions. For more information, visit our website at www.oracle.com/retail
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