Research says Customer Loyalty Is dead On the Net
The internet has created a platform where customers no longer value brand loyalty, according to a survey by Forrester Research.
Almost 60 per cent of UK shoppers have not decided on the brand they will purchase before researching or buying a product online, the study suggests. Some 86 per cent of respondents use ratings and reviews for online purchases and 44 per cent go online before buying products in-store.
David Selinger, CEO of online consultancy firm RichRelevance, said, "Customers have learned to ignore most things on websites, but there are a few tools that do move needles. The fundamental way to make decisions for consumers is through recommendations. Companies should not be afraid to incorporate negative reviews on their sites."
He added, "Customers will write reviews regardless, so it is better to be part of that story. If there's one consistent trend, it's that loyalty has gone."
Patricia Evans, research director at Forrester, said many companies see integrating user-generated content as an end in itself and fail to appreciate the value it can create, both online and in-store.
"Businesses are still scared by how much they'll get, that they won't get enough, or that customers will say something negative," she said. "They have the approach still that we tell our customers what to want."
According to Evans, the UK is a relatively mature market for e-commerce, with annual order value per customer the highest in the world at about $900, compared with $750 in the US.
Of the 500 shoppers surveyed, 42 per cent use their mobile phone while shopping, of whom 16 per cent used it to compare prices with other stores.
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