When it comes to shoppers returning to the same store time and time again, Wal-Mart is a dominant force across all retail categories. But the discount chain isn’t so great at engendering customer loyalty.
Despite its popular “Every Day Low Prices” business model, Wal-Mart’s shopping experience is far from emotionally rewarding. In fact, discounted prices could actually turn customers against a brand, according to a recent survey by Colloquy, a marketing consultant and publisher.
“Wal-Mart’s model of retailing has been successful and has forced others to follow suit,” Rick Ferguson, editorial director of Colloquy, says. “But price is [just] one part of the mix.”
Store environment, customer service and a wide product variety were other top factors necessary to capture shopper loyalty, the survey found. Shoppers are most apt to recommend a retailer — the No. 1 way to gauge loyalty — based on their thoughts about the store layout, product quality and value for money.
“Quality merchandise and retailer formats seem to engender more loyalty,” Ferguson says.
Formats such as membership clubs bring in the most loyal shoppers.
For retailers, Costco took the No. 1 spot for shopper loyalty across personal care, mass merchants and grocery categories. Grocery was the overall category that attracted the most loyalty, garnering an 8.2 rating based on a scale of one to 10, with 10 being “very loyal.” Shoppers were the least loyal to specialty stores.
“Customers are more loyal to grocery stores because it’s where they have to shop,” Ferguson explains. “Whereas with a shoe retailer, a commodity product, they tend to be less loyal.”
Colloquy surveyed 3,000 people across six demographics in November. The full report, the Colloquy Retail Loyalty Index, is available at www.colloquy.com/whitepapers.