Online buyers prefer engaging directly with brands

Vantage point: Insights from cutting-edge research

The retail industry is constantly undergoing change, altering the roles of retailers, brands and shopping channels to meet consumer demands for information, convenience and high-quality commerce experiences. While traditional consumers once preferred multi-brand retail experiences, the pendulum is shifting towards the brand, putting greater importance on manufacturers’ websites for sales, research and service. In fact, 55 per cent of shoppers prefer to shop directly with brand manufacturers over retailers, according to Astound Commerce Insight’s “Global Brand Shopper Survey”. With two out of three online shoppers surveyed having purchased at least three products in the past six months, business is brisk at brand sites as well.

To better understand how consumers shop with brand manufacturers and their expectations for brand experiences, Astound Commerce surveyed 1,000 consumers who shop online and have visited a brand manufacturer’s website in the past six months. The survey found the majority of these shoppers (54 per cent) turn to brands over retailers for more comprehensive product information, in addition to enhanced customer service, better prices and more personalisation options. “The role that brand manufacturers play in today’s retail landscape has evolved,” said Lauren Freedman, SVP of digital strategy for Astound Commerce. “Consumers’ heightened expectations for digital commerce means brands must master online selling and present compelling and competitive shopping experiences, on par with multi-brand counterparts. Moving forward, brands and retailers must explore even more creative ways to demonstrate value and engage through experiential means to woo younger customers and maintain customer loyalty, particularly in light of the challenging retail climate.”

Managing divided attitudinal loyalty of business customers

While companies toil to gain undivided customer loyalty, customers have long displayed a propensity to exhibit divided loyalties towards brands — while purchasing even basic commodities. Most of the research on understanding customer loyalty has focused on the behavioural aspect. The simple rule is that repeated purchases of the same brand signal customer loyalty. However, this measure of loyalty suffers from a major deficiency — that of not being able to capture the divided loyalty attitudes of customers. It also hampers exploration of the crux of the problem: motivations behind the divided loyalty behaviours.

S Arunachalam, assistant professor of marketing at the Indian School of Business, says it is imperative to understand the motivations behind divided loyalty for two reasons: to gain deeper insights into customers’ loyalty attitude determinants; and to help companies gain managerial insights on understanding and handling divided-loyal customers to the company’s benefit. He says, “An understanding of customer loyalty begins with an understanding of customer motivation. Unless brands understand the motivations behind the divided loyal behaviours of customers, brands will struggle to create meaningful relationships or enduring engagements with customers.” The results of a study by Arunachalam and his colleague show firms must pay attention to divided-loyal customers as they form around 30 per cent of the customer pool. For firm-friendly results, firms could get dealers to intervene on their behalf and recommend products to end customers. The study also stresses that a customer-value oriented strategy is more effective than an incentive-reward strategy in motivating dealers to recommend a product to customers.