A recent study, conducted by ICLP, revealed that amidst Singapore's retail doldrums, 3 in 4 consumers indicated they would buy more from retailers in the city state, if they were better rewarded for their loyalty.
The results are interesting, considering that many consumers are currently lukewarm about their relationships with brands and retailers, giving average to low scores in terms of passion (brand enthusiasm), commitment (loyalty), and intimacy (willingness to share information with a retailer).
Out of 750 consumers surveyed, only 3% consider themselves to be devoted to their preferred retail brands, expressing willingness and desire to forge enduring relationships with them.
These findings come at a time when Singaporeans' love affair with shopping and retail has been under strain. Even as retail sales show a modest year-on-year growth of 2%, there have been a slew of notable closures in the local retail landscape, most recently that of John Little, one of Singapore's oldest department store.
"What we are seeing from our research is that many Singaporean consumers still relate to brands and retailers at a transactional level, so when times are uncertain, they easily resort to the myriad of choices that are at their disposal, often literally at their fingertips now," said Mr Bruno Tay, Country Manager of the global loyalty marketing agency ICLP, which conducted the survey as part of an international study across nine markets.
"It's not too late to turn things around, though. In fact, retailers now have a chance to truly stand out if they appeal to the heart too - by approaching communication, reliability, consistency, reward and recognition from a human perspective", he concluded.
The survey reveals underlying gaps in Singapore consumers' retail experience by modelling the brand relationships after the psychology of individual relationships with friends and romantic partners. Singaporean consumers were asked to rate their retail experience with brands on seven core relationship criteria, namely recognition, rewards, reciprocity, reliability, respect, trust and communication. These were then mapped onto a model based on Sternberg's Triangular Theory of Love, in partnership with an expert on relationship dynamics Prof Ron Rogge at the University of Rochester in the United States.
Based on the three dimensions of a relationship - passion, commitment, and intimacy - the consumers' experiences with brands and retailers are then further classified into six types. In increasing order of desirability, these range from empty, liking, casual, romantic, companionate to devoted.
Devoted consumers, who currently form the marginal minority in Singapore, are those most willing to share personal information, opinions and desires with their favorite brands, and are least likely to stray to competitors. Notably, 92% of customers that fall into this group would recommend a brand they are devoted to. This is a significantly higher proportion than for consumers in the other types of relationships with their retail brands. Only 12% of customers in a 'liking' relationship would recommend a retailer to others, 27% in a 'casual' relationship, 56% in a 'companionate' relationship, and 69% in a 'romantic' relationship.
"The rarity of devotion amongst Singaporean consumers underlines a sizeable gap and opportunity for local retailers and brands. Devoted consumers are keen to be advocates, so driving this pinnacle relationship can have tremendous effect on retailers' business through word of mouth and social media sharing", Mr Tay explained.
The research findings suggest that in order to take their relationship with brands and retailers to the next level, Singaporeans do not just want traditional points-based reward programs, but also personalized rewards. Much like in a relationship with friends and loved ones, they would engage more when they receive genuine gestures that surprise and delight them.
Furthermore, the study shows that 67% of Singaporean consumers would buy more if retailers use their data in carefully considered, contextual ways to better understand their individual needs and preferences. This suggests the need for retailers to better leverage data technology and put in place more robust customer relationship management practices. 61% of consumers also place an emphasis on the importance of better communication, indicating that they would buy more if brands communicate with them better, in ways that express reciprocity and shared passion.
Within the global context of the study, Singaporean consumers seem to be quite closely on a par with their counterparts in Hong Kong and Australia, where only 1% and 3% respectively are in devoted relationships with brands. And this is in stark contrast with the 21% of consumers in India who are devoted to their preferred brands.
However, across the nine markets surveyed, including United Kingdom, United States, Brazil, United Arab Emirates, mainland China, Hong Kong, India, Singapore, and Australia, there is broad consensus that a well thought out loyalty program can help deepen consumers' connection with brands.
"Thinking about our own personal relationships, we know that people fall in and out of love and friendships -lured by 'greener pastures'," Mr Tay said. "Now we know that the same thinking can be applied to brand relationships that are dynamic and ever changing. Retailers looking to build and maintain devoted customer relationships should seek to truly understand the emotional factors that drive consumer loyalty."