The Logic Group Blog

I’ve seen so many price deals on the high street: after we passed the months of “Closing sales” when we saw retailers going under immediately after the crisis hit, we saw another wave of front-windows posters crowded over to lure us in the stores : ‘£££ off’ deals & price wars. I’m sure I’m not the only one watching my cash and not spending at my discretion because the wallet just got too tight but one thing I will not do is chase the cheapest deal: I will plan and cut down on my spend but I’d like to think value does matter, service is important and I get what I need.

The Logic Group worked with Ipsos MORI on a loyalty survey end of April 2010 and found out that consumer’s feelings of loyalty have dropped over the last 12 months when it comes to supermarkets as compared to any other sector. Whereas we are seeing consumers feeling loyal to brands in sectors like mobile carriers, restaurants & coffee shops, fashion and even insurance and banks (if you can believe that!), the supermarkets sector is the only one to see a downward trend when it comes to consumer loyalty. And this must be nothing else than their agility to play on price. Ironically enough this seems to be a double edged sword: what brought different customers in the shops chasing the best deal might have switched loyal ones to competition. All of a sudden, the price battle between supermarkets and retailers have loosen the ties with their loyal customers and made them look around – where does loyalty play in this?

We have all forgotten about the all mighty service and the brand value. Consumers don’t become loyal on price: we have just seen Asda posted a fall in underlying sales for the second quarter in a row, with consumer confidence buffeted by the prospect of the cuts driven by the new government, rising taxes and job losses. It seems that “Everyday low price” is not enough.

The bottom line is that good deals must go hand in hand with relevant offers; otherwise, I will not spend my money for the sake of a cheap purchase. And that’s where I think loyalty must play its role to bring more business to a retailer.

Read more about the survey on consumers’ feelings to loyalty – you’ll find useful information and maybe will give you some new ideas; if not, it will re-confirm if your strategy on loyalty is right. Enjoy!