Study finds customer loyalty divides online and traditional retailers

Despite the global economy continuing to creak and groan and generally threaten the world with Armageddon, the high street remains more confident than online retailers.

by Michael Northcott
Last Updated: 19 Aug 2013

The effect of e-commerce on the traditional high street retailer is a varied debate – many high streeters are booming despite the growth of online. But in the latest research from Eccomplish, around a quarter of online retailers are anticipating growing revenues by more than 20% over the next 12 months. But it’s not just the pure-play online retailers who are expecting a jump in sales. Around 73% of pure-play online retailers are expecting growth (anywhere between 1%-20%), compared with around 79% of multi-channel retailers (both shops, online and mobile). 

An even starker difference is that only 4% of pure play retailers are expecting growth of more than 50% this year, compared with more than twice as many (10%) multi-channel retailers. 

So why is it that the pure-plays are stuck slightly behind their multi-channel counterparts? The Eccomplish survey found that customer loyalty is the principal difference between the two models and their methods for reaching the market. The survey, which interviews 100 directors of e-commerce from a range of different retailers with annual turnovers exceeding £3m, found that pure play online retailers’ biggest single focus was customer loyalty. About 88% of pure play outfits treated customer loyalty as the principal strand of their strategy and the report describes loyalty as being something of a ‘Holy Grail’ for pure play stalwarts.

Multi-channel retailers have their own concerns however. Whilst they are less interested in generating customer loyalty – we can only guess that a logo on the high street is more recognisable than another thousand websites – they do work hard to open new channels. That may sound like jargon, but it means they are keen to reach more new potential customers, and they invest more than the pure plays in it. For 69% of multi-channel retails, ‘the introduction of new channels to market’ is the joint most important element in which they invest. An equal number of multi-channelers cite customer loyalty, but online-only companies seem keener on this.

Many in the high street will be searching for ways of making the till ring whilst the economic weather remains tough, but it is at least encouraging for the high street that e-commerce has its struggles too, and for the time being, it seems high streeters are feeling more confident about the year ahead…

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