Customer Loyalty in Retail and Apparel – Thematic Intelligence

Customer Loyalty in Retail and Apparel Thematic Overview

In retail, customer loyalty is an important parameter for any retailer’s success in today’s competitive landscape. However, it is challenging to retain customer loyalty as there is a plethora of retailers to choose from. In addition, the prevalence of online shopping allows consumers to easily compare retailers’ propositions and pick the most suitable product based on factors such as price, product, or experience.

It is more expensive for retailers to acquire new customers than retain existing shoppers. Business strategies such as loyalty schemes; data analysis including using artificial intelligence (AI); and customer relationship management, assist retailers in keeping their consumers satisfied and prevent them from switching to competitors.

The ‘Customer Loyalty in Retail and Apparel’ thematic intelligence report gives you an in-depth insight into the customer loyalty theme and the impact it will have on the retail and apparel industry. It provides a comprehensive analysis of the industry, including real-life case studies that showcase how the retailers have responded to the impact of this theme in their operations. The report analyzes the value chain components of the theme and the market trends that will shape the theme in the coming years. It also provides insights into the key players and the competitive landscape of retail & apparel companies within the customer loyalty theme.

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Customer Loyalty in Retail and Apparel – Key Market Trends

The main trends that will shape the customer loyalty theme over the next 12 to 24 months can be classified into technology trends, macroeconomic trends, regulatory trends, and retail trends.

Technology trends: The adoption of technologies such as blockchain and AI to enhance the shopping experience, and the significant growth in the use of mobile wallets as a preferred mode of payment are a few technological trends that will impact the retail and apparel industry in the coming months.

Macroeconomic trends: Inflation affects purchasing power and consumer behavior, which is crucial to consider when discussing customer loyalty. Rising inflation is the key macroeconomic trend impacting the customer loyalty theme.

Regulatory trends: Security and safety concerns over customer data and the subsequent regulatory measures to avoid data misuse are the key regulatory trends impacting the customer loyalty theme.

Retail trends: The availability of different online fulfillment options such as next-day delivery, click & collect services, and third-party pickup; a range of easy payment methods, focus on ESG, and the rise in online and mobile shopping are the key retail trends impacting the customer loyalty theme.

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Customer Loyalty in Retail and Apparel – Industry Analysis

Customer loyalty varies across apparel, food & grocery, electricals, health & beauty, and home sectors. For instance, in the apparel sector, building customer loyalty is crucial as the market is saturated with so many players offering similar products that make it easy for buyers to switch to another retailer. Retailers and brands can create loyalty through other channels such as social media involvement and hosting events. Also, consumers, especially Gen Z, can be more drawn to brands that mirror their values regarding sustainable and ethical practices. On the contrary, customer loyalty is low in the home sector wherein purchases are frequent. The low frequency of purchases in areas such as furniture & floorcoverings contributes to lower levels of loyalty.

The report also covers insights on the following:

• Use cases
• Timeline

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Customer Loyalty in Retail and Apparel – Value Chain Analysis

The value chain components for customer loyalty in the retail and apparel industry is categorized into three segments – manufacturing and distribution, retail, and customer relationship management. Success and efficiency across all three segments are essential for retailers to acquire data, promote their propositions, build their reputations, create loyal customers, and ensure a steady revenue stream.

Manufacturing and distribution: A streamlined and efficient supply chain, adopting sustainable practices, and a successful distribution network play an important role in increasing the efficiency of manufacturing and distribution operations. For instance, adopting sustainable practices can help retailers reduce their impact on the environment, and target and retain eco-conscious shoppers. For retailers to reduce their environmental footprint, they must make their manufacturing and distribution methods more sustainable. They need to focus on using sustainable materials, reducing transportation emissions, minimizing waste, and employing renewable energy, with carbon neutrality being an increasingly common goal of retailers.

Customer Loyalty Value Chain Analysis

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Customer Loyalty in Retail and Apparel – Competitive Landscape

A few of the key companies making their mark within the social media theme are:

Public Companies: Costco, H&M, Lowe’s, Nike, and Walmart are a few of the leading public companies making their mark in the customer loyalty theme in the retail and apparel sector.

Private Companies: David’s Bridal, IKEA, and Lidl are a few of the main private companies making their mark in the customer loyalty theme in the retail and apparel sector.

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Retail Sector Scorecard

The retail sector scorecard ranks companies through the thematic screen, valuation screen, and risk screen. The thematic screen ranks companies based on overall leadership in the 10 themes that matter most to their industry, generating a leading indicator of future performance.

Retail Sector Scorecard Analysis

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Scope

• GlobalData provides detailed insight into the theme of customer loyalty, specifically focusing on its impact on the retail and apparel sectors.
• The report provides an overview of customer loyalty and its components, the leading companies, and the timeline of developments in the customer loyalty theme.
• The report thoroughly explains the relevant trends across technology, macroeconomic, regulatory, and retail trends.

Key Highlights

• Customer loyalty is a key determinant of whether a retailer succeeds or fails.
• The digital age presents challenges to retailers as it enables customers to easily compare propositions and switch retailers.
• The retail and apparel sectors can gain significant marketing clout through the recommendations of a loyal customer base, particularly in the age of social media.

Reasons to Buy

• Understand the theme’s ecosystem will get you ahead of the curve. Themes are disruptive, so it’s easy to be blindsided by industry outsiders who invade your sector.
• Understand the important themes in 2024 and beyond, allowing you to grasp a wider view of changes in consumer behaviour and how it will impact your markets.
• Explore how emerging themes in retail are allowing industry leaders to evolve, so you can better position yourself for long-term success.
• Get an easy-to-use framework for tracking themes across all companies in all sectors.