The topic of brand loyalty has been a hot topic for
discussion, specifically when discussed in the same breath as
Millennials. Unlike their parents’ brand loyalty that is founded on
personalized and long-lasting relationships, a recent survey conducted by only
survey firm MindSwarms, describes Millennials’ brand loyalty as user-centric
and unemotional. It is important to qualify these descriptors as being tied
to a tendency to become temporarily loyal to a particular brand merely to take
advantage of the convenience or rewards offered. An important point to note is that while
loyalty/rewards programs can be effective in capturing a loyal following, there
are some sizeable challenges to getting people to commit due to the sheer
amount of frustration that comes along with the process. A research
paper published by Emerald Publishing Group addresses this exact point and
highlights four categories of
frustration: inaccessibility, worthlessness, qualification barrier and
redemption costs. So the challenge
to online retailers, is how to harness the sporadic purchasing behavior of
Millennials. This loyalty discussion has become incredibly important especially
for retailers that are exclusively online based such as Wayfair. It is no
secret that Millenials are savvy online shoppers, yet as an Accenture
study has found, they still heavily frequent brick and mortar stores, and
often use online sites to find the best price before making a purchase.
Therefore, it is very important that online retailers attract Millennial
shoppers not only with great prices, but with effective loyalty/rewards
programs.
One rewards program I have found to be an untapped, golden
opportunity for retailers, specifically online retailers, is the cash back
rewards program. I was extremely thrilled to find that Wayfair
offered this option having needed to make another purchase after I had
forgotten an item. At the checkout page I was prompted to use my cash rewards
towards my purchase. Extremely wary of cash reward programs, I did some
research, and found to my surprise that it was a legitimate rewards program. And it combats the four categories of frustration:
1. inaccessibility - totally accessible; reward dollars can be applied toward any future purchase
2. worthlessness -not worthless at all; you save more when you buy more (3% back on every purchase). And, you can refer a friend for $10 rewards cash
3. qualification barrier - none; you are automatically enrolled when you sign up
4. redemption costs - none; you choose when to use your cash rewards on any product, no restrictions
The bottom line is more online retailers should be exploring this option!
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