You may have read some of the complaints about the pickup and delivery services from grocery stores during the COVID-19 lockdowns, not exactly a good look for brand loyalty. Some families complained that service has even gone down and wait times up as in-store restrictions have eased.
The problem: The number of workers focused on delivery and pickup has decreased as retailers have reassigned more employees to help store customers. These businesses also are dealing with a nationwide worker shortage affecting many industries.
Shifting Some Loyalty
It will be interesting to see how all of this plays out, particularly when it comes to brand loyalty. During the pandemic, we have certainly seen shifts in brand loyalty and consumer preferences. Some of this was due to convenience, such as when consumers switched to brands that were quicker to adopt new ways of shopping at the start of the pandemic and lockdown restrictions.
The brands that seem to have weathered the pandemic best in terms of loyalty are those which adapted early to meet changing consumer needs. For the most part, consumers remained loyal to their favorite brands during the events of 2020. In fact, more than half of consumers stayed loyal to a brand despite the events of last year. If you look at the U.S. car market, J.D. Power said pandemic lockdowns led to increased brand loyalty.
A May 2021 survey from Smarty found that a majority of Americans have brand loyalty, especially to their favorite grocery and electronics stores. The research revealed that more than 73% of Americans say they have brand loyalty. The survey also indicated that the pandemic caused people to elevate the brands they like and do not like.
For those brands fortunate enough to gain new customers during the pandemic, the big challenge is how to keep them. I like to think of brand loyalty as a business relationship. A brand establishes a value-based relationship with customers in terms of what it provides and its unique value proposition the customers experience through the brand. Brands may think new customers will stick around, but the shift back to another brand is easy for consumers. If you fail to deliver, including on those new promises made during the pandemic, somebody else will be waiting to meet those expectations.
Banking on Behavior
One thing that works in favor of brands is human behavior. I probably do not have to tell you that Americans are very much creatures of habit. I have seen several surveys saying that perhaps two-thirds of Americans are very loyal to their brand. Once we establish brand loyalty where we have seen the value proposition, it is very difficult for us to make a switch. That is great news for brands since it is much more expensive to gain new customers than to keep existing ones.
Many brands saw this in action during the pandemic. We already talked about high brand loyalty for automakers, but here are some more examples:
- Major grocery and convenience retailers kept customers and gained new ones by offering early shopping hours for seniors and creating new contactless options for customers.
- Major clothing and home goods retailers offered new delivery and pickup options for current and new customers during the lockdowns and pandemic restrictions.
- Restaurants increased their delivery and pickup options for customers, along with increasing the value of their loyalty programs to keep current consumers and gain new ones.
I see many of these new options remaining as we move past the pandemic, particularly those such as senior hours and pickup offerings. We are already seeing some changes again to loyalty programs that move away from generous rewards during the pandemic. Changes are likely to continue at least through the new year.
Delivering Up Uncertainty
One space that will be particularly interesting to watch over the next several months is food delivery. During the pandemic, these businesses saw huge increases in demand as customers used them to deliver goods while in-store shopping was limited, and many more people were working from home.
But while it was convenient to order meals while working from home during the pandemic, that may not be the case moving forward. In fact, going out to pick up food may be seen as a nice break for remote employees during their workdays.
The pandemic has created an exciting challenge for brands as we move forward and emerge from pandemic restrictions and shifting consumer behaviors. Brands need to keep working hard and developing innovative ways to show love to their customers who have remained loyal despite the challenges of 2020. Brands need to keep delivering on the promises they made during the pandemic to keep those customers who switched brand loyalties during the pandemic.
Vipin Porwal is founder and CEO of Smarty