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Capgemini: Retailers must focus on emotional engagement

Dec 08
 
Tags: Capgemini
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Capgemini: Retailers must focus on emotional...

Adopting a strategy that involves making an emotional engagement with customers could deliver tangible benefits for retailers, according to Capgemini.

The consultancy firm's Digital Transformation Institute recently released a report titled 'Loyalty Deciphered - How Emotions Drive Genuine Engagement', which is based on the views of more than 9,000 consumers and 500 executives.

One of the key conclusions from the research is that stronger emotional engagement with customers could help retail businesses increase their annual revenues by five per cent.

More than four out of five survey respondents (82 per cent) with a strong emotional engagement with a brand said they would always go with that company when making a purchasing decision. This compares with 38 per cent of consumers with low emotional engagement.

Furthermore, 81 per cent of emotionally connected consumers said they are likely to spend more on their purchases and will also promote their favoured brands to family and friends.

A substantial proportion (86 per cent) of the individuals surveyed said they wanted retail brands to be engaged and to repay their loyalty in two-way interactions.

Capgemini stressed that retailers need to move away from traditional approaches to earning loyalty. It claimed that current, widely used strategies are "broken", with an earlier study finding that more than half (54 per cent) of loyalty memberships are inactive.

Kees Jacobs, consumer goods and retail lead at the firm, said: "Consumers are immune to transaction-based loyalty programmes 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."

Capgemini recommended some key strategies that could help to earn consumer loyalty, including:

  • Promoting honesty, trust and integrity within the business.
  • Building two-way customer relationships.
  • Making an effort to know and understand customers to build meaningful experiences.
  • Providing timely and significant rewards for loyalty.

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Image: iStock/AndreyPopov

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