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Facts,
Figures & the Future
November 2004 Issue
Ken
Greenberg
Senior Director
ACNielsen
Homescan
Is customer loyalty
becoming an oxymoron, or can retailers develop a long-term
bond that will keep customers coming back?
New retail formats are cropping up every day, retail channels
overlap one another and thanks to the Internet nothing is
more than a mouse click away. Retail technology has given
us information on where consumers shop and what they buy.
But the essence of customer loyalty is listening to people
- finding out why they shop one particular venue and avoid
others - and creating a satisfying shopping experience with
repeat business that doesn't depend on having the lowest prices
in town.
Over the past several years, many have focused on frequent
shopper programs as a way to build business. According to
the most recent ACNielsen Homescan consumer panel survey,
81 percent of households belong to at least one such program.
The problem is that 73 percent of those households belong
to more than one. It seems that frequent shopper programs
have become more about saving money than building loyalty.
On their own, few of these programs help differentiate retailers
from one another because the business is no longer about just
selling products. It's about convenience, customer service,
selection and a myriad of other factors. The opportunity lies
in discovering what drives consumers to different stores and
why a retailer may be strong in one market but weak in another.
The issue is not just about dollar loyalty but emotional loyalty
which requires getting in synch with the consumer's mindset.
This January, ACNielsen Homescan will roll out Shopper Trends,
a new model that will quantify consumer attitudes and identify
the key drivers of a store's brand equity - as well as how
vulnerable retailers may be to new and existing competition.
The model applies Winning Brands(R), ACNielsen's globally
recognized brand-equity segmentation service, to retailer
equity and links it to the Homescan panel.
The analytical tools are in place. Customer loyalty doesn't
have to be as elusive and indefinable as it seems. There are
tangible reasons other than price for people to shop a particular
store. Finding out what they are has the potential to significantly
impact both loyalty and profitability.
For the complete
November issue of Facts, Figures, & the Future, visit
the website at http://factsfiguresfuture.com.
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