By A Correspondent
Capgemini’s Digital Transformation Institute has released a new report titled “Loyalty Deciphered— How Emotions Drive Genuine Engagement,†which seeks to understand the main drivers behind brand loyalty. The report, which surveyed more than 9,000 consumers and 500 executives, found that emotions have the strongest impact in driving consumer loyalty. For retailers who are able to foster loyalty through higher emotional engagement with consumers, there is a great potential business benefit of possibly increasing annual revenues by five per cent. The new report also identified a stark disconnect between executives and consumers on how well organizations are making emotional connections; where 80 per cent of executives feel their brand understands the needs and desires of their consumers, only 15 per cent of consumers agree.
An earlier report found that 28 per cent of consumers are abandoning loyalty programs without redeeming any points and over half (54 per cent) of loyalty memberships are inactive.
Said Kees Jacobs, Consumer Goods & Retail Lead, Insights & Data Global Practice at Capgemini:“Consumers are immune to transaction based loyalty programs of the past, so a retailer’s engagement with consumers needs to shift from being transactional to more emotional and meaningful. Decoding human emotions will ensure that brands have a better understanding of their consumers leading to building deep-seeded engagement and long-term loyalty with them. With a potential revenue boost of 5% up for grabs, and weak emotional connections ready to be exploited by the competition, no retailer can afford to ignore this reality.â€
The report identified a new sub-set of consumers, those with a high emotional connection to the brands they use or visit frequently. Females and males are equally represented in this group, but millennials (58 per cent, aged 18-36) and consumers in urban locations (53 per cent) comprise the largest proportion. From the countries surveyed, Italy (65 per cent) and Brazil (57 per cent) comprise of the most highly emotionally engaged consumers. Followed by US (56 per cent) and Spain (51 per cent).
Capgemini Digital Transformation Institute surveyed 548 executives at director-level or above at large companies with 80% of the executives in companies with reported revenue of more than $1 billion in FY 2016. It also surveyed 9,213 consumers aged 18+. Both surveys took place from August to September 2017, and covered nine countries–Brazil, France, Germany, Italy, the Netherlands, Spain, Sweden, the United Kingdom, and the United States; and four industries–Financial Services, Retail, Telecom, and Automotive.