Emarsys’ Annual Customer Loyalty Index highlights consumer attributes unevenly impacting loyalty to retailers, brands and stores – urging brands to listen to individual customer needs
In an era of high inflation and economic uncertainty, overall customer loyalty is now tied more directly to price than a year ago. According to just-released data from the second annual Emarsys Customer Loyalty Index, 58% of US respondents agreed with the statement ‘I am more loyal to retailers that offer me discounts, incentives, and rewards,’ a 7% increase from 51% in 2021. Despite this overall trend, the data also show ways different customer attributes – age, gender, geography, political affiliation, and ethics – affect their loyalty.
“It’s never been more crucial for brands to truly understand their customers: it’s not enough to be customer centric anymore, brands must be customer obsessed. To make themselves as recession-proof as possible, brands must know customers on a granular level and recognize which factors impact loyalty among different customer groups,” said Meghann York, Global Head of Product Marketing, Emarsys, an SAP company.
“Knowing specifically what triggers buying behavior among an increasingly fragmented marketplace will help brands attract and maintain loyal customers as we head into a holiday shopping season that we know will be bigger than last year.”
Price Generally Trumps Traditional Loyalty Drivers
According to this year’s Loyalty Index, overall brand loyalty in the US is trending slightly up year-over-year (74% loyal to certain retailers, brands and stores in 2021, 79% in 2022), however 3 in 5 (60%) respondents said that inflation has made them leave brands to which they’ve previously been loyal, in an effort to save money. When asked what drives their loyalty to retailers, the #1 response among those surveyed was discounts, incentives, and rewards (58%), ahead of great customer service (49%) and high-quality products/services (45%). Of the things a brand would have to do to lose their loyalty, increased prices tops the list – with 54% of respondents listing this as their reason for abandoning their loyalty to a brand, ahead of selling poor quality products (42%), and making the shopping experience difficult (30%).
When one delves into the data at a deeper level, it becomes clear customer loyalty is more than a simple correlation with price – in fact, there are numerous variables at play, which means it’s increasingly important for brands to understand their customers, and engage with them anywhere, personalize everywhere they are, and reach anyone, wherever they may be.
To retain and grow a customer base, brands must be able to connect data and channels, adapt with speed and agility to keep pace with customers and make quick decisions with guidance.
Broad agreement on ‘Made in the USA’ but groups differ widely on ‘Made someplace else.’
In the US, ‘Made in the USA’ still means something, and loyalty has a direct tie to this with 68% of American respondents saying they are more likely to be loyal to US-made brands, with minimal differences across geographic, gender, generational and even political lines. Democrats and Republicans are virtually even, with 74% (D) and 73% (R) saying they are more likely to remain loyal to brands whose products are made in the US. However, how Americans feel about loyalty to a brand whose products are made in other countries varies widely by political affiliation. If a brand’s products are made in China, 39% of Democrats are more likely to be loyal to that brand, compared to only 16% for Republicans. If products are made in Ukraine, 51% of Democrats are more likely to be brand loyal, compared to 29% of Republicans. Loyalty Index data shows similar differences in loyalty for products made in other countries, including Mexico, Taiwan and even Canada.
The differences in brand loyalty are just as pronounced between men and women, with men, on average, being more than twice as loyal to brands whose products are made in foreign countries. For instance, 44% of men are more likely to be loyal to brands producing goods in Mexico, compared to 18% of women.
Broken down by age, the loyalty gap also widens when it comes to brands whose products are manufactured outside of the US. For example, just 16% of people between 45-54, and 6% of those 55 years and older are likely to be loyal to brands whose products are made in China, compared to 35% of 25 to 34-year-olds and 40% of 35 to 44-year-olds who said the same.
The state people call home also determines where they stand on brand loyalty as it relates to product origin. Nearly half (45%) of Californians are more likely to be loyal to brands produced in Mexico, compared to 33% of Floridians and only 13% of Michiganders.
When it comes to loyalty, groups give different weight to brands’ alignment with their values
Although price is a higher determinant of customer loyalty (58%) than alignment with values (29%), people of different political stripes are impacted differently. More than a third (36%) of Democrat respondents are more loyal to retailers that have strong moral or ethical values, compared with just over a quarter (26%) of Republican respondents who said the same. Almost half (48%) of Democrat respondents agree that they have switched from a brand they were loyal to following a controversy with a key executive (e.g., a CEO or Founder), compared with just under 3 in 10 (29%) Republican respondents who said the same. And 34% of Democrats say they are more loyal to retailers that prioritize sustainable business practices, compared to 18% of Republicans who feel the same way.
Generationally, about 1 in 3 consumers (combining 2021 and 22 data) between 25-34 (29%) and 35 to 44 (31%) prefer retailers that prioritize sustainable business practices, with half (50%) of 25 to 34 and 35 to 44-year-olds reporting they’ve switched brands when they felt a company fell short of their sustainability expectations. In contrast, only 15% of respondents (combining 2021 and 22 data) over 55 expressed a commitment to sustainable brands, with only 16% saying they would switch from a brand they were already loyal to, if a company failed to be committed to eco-friendly practices.
Some groups are more price sensitive than others
Across the board, 60% of Americans say inflation has impacted their loyalty to a brand in an effort to save money. When this data is parsed along income, gender and political lines, a different picture emerges. 9 in 10 respondents in households with an income of $120,000 or more say they consider themselves ‘loyal’ to certain retailers, brands, and stores, compared with less than two thirds (65%) of respondents in households with an income of less than $8,000, who said the same.
Republicans tend to be more brand loyal in the face of rising prices compared to Democrats. When asked if their favorite brands raised prices in different sectors, Republicans were less price sensitive than Democrats. Below are the percentages of Democrats and Republicans who would stop buying from their favorite brands if those brands raised prices by 25%.
| Industry Sector | Democrat | Republican |
| Airlines | 32% | 44% |
| Alcoholic drinks | 33% | 43% |
| Automobiles | 33% | 46% |
| Beauty and skincare | 32% | 44% |
| Clothing and fashion | 32% | 43% |
| Energy | 28% | 39% |
| Food | 27% | 34% |
| Food delivery | 36% | 50% |
| Furniture/homeware | 32% | 47% |
| Medicine/pharmaceuticals | 28% | 35% |
| Non-alcoholic drinks | 34% | 45% |
| Technology | 29% | 42% |
Along gender lines, men tend to be more brand loyal in the face of rising prices compared to women. Across different sectors, below are the percentages of males and females who would stop buying from their favorite brands if those brands raised prices by 25%.
| Industry Sector | Male | Female |
| Airlines | 33% | 41% |
| Alcoholic drinks | 32% | 44% |
| Automobiles | 33% | 42% |
| Beauty and skincare | 33% | 42% |
| Clothing and fashion | 32% | 42% |
| Energy | 30% | 37% |
| Food | 26% | 32% |
| Food delivery | 37% | 49% |
| Furniture/homeware | 35% | 44% |
| Medicine/pharmaceuticals | 28% | 35% |
| Non-alcoholic drinks | 34% | 44% |
| Technology | 29% | 42% |
Not all industries are equal when it comes to loyalty
When thinking about the retailers to which they are most loyal, survey respondents who are loyal to one or more retailers were asked to identify which industries they are in. Below are the top 7 industries ranked by customer loyalty:
- Clothing and fashion (57%)
- Food (55%)
- Beauty and skincare (41%)
- Technology (28%)
- Medicine/pharmaceuticals (21%)
- Furniture/homeware (20%)
- Food delivery (20%)
The gender loyalty divide also plays out by industry. More than 3 in 5 (63%) of female respondents are most loyal to brands in the clothing and fashion industry, compared with under half (49%) of male respondents. A third (33%) of male respondents are most loyal to brands in the technology industry, compared with under a quarter (24%) of female respondents. Half (50%) of female respondents are most loyal to brands in the beauty and skincare industry, compared with 3 in 10 (30%) male respondents.
And while consumers across all age groups agreed that an increase in price would significantly lower their overall brand loyalty, some industries were more impacted than others. In fact, nearly half of Americans between 45-54 (46%) and over half of those 55+ (55%) said that raising the price of clothing and other retail items by as little as 25% would decrease their likelihood of remaining loyal customers. Comparatively, only 27% of Americans between the ages of 25-44 said the same.
York continued: “Our Loyalty Index research is clear – there isn’t just one factor influencing customers. There are so many variables at play. So, to increase customer loyalty, you must really understand a customer. You can’t be looking at or outreaching in just one place – you must be able to engage anywhere, personalize everywhere, and reach anyone, with the right message. But what does that mean? Well – it means being aware of three things.
“Firstly, it’s remembering that today’s consumers expect to be and are in control. They choose when, where and how they want to engage with a brand, so if you’re waiting for a customer to come to you on the channels you as a brand prefer to use, you’ll be waiting a long time. You must be able to engage anywhere.
“Secondly, marketers talk a lot about highly relevant personalized experiences, but to make them truly relevant for customers, you can’t just personalize one or two touch points along their journey – you need to personalize everywhere. Which means listening to your customers’ ever-changing behaviors and reacting accordingly.
“And finally, marketers are tasked with engaging more audiences than ever before. In today’s world, you need the ability to engage anywhere and personalize everywhere, but you also need the ability to reach anyone, no matter the audience or scale of your business to really grow and keep your customer base.
“It’s not an easy task, though. Nearly one third of marketers fail to achieve their goals because they can’t act on their existing customer data. While 50% are unable to use the data collected from new customers because it lives in silos. That’s why at Emarsys we aim to fully empower marketers – helping them achieve true 1:1 omnichannel customer engagement, by dedicating ourselves to continuous innovation to drive real results.”
About the Emarsys Customer Loyalty Index & Emarsys Products
The Emarsys Customer Loyalty Index in its second year, is based on a survey of 4,008 nationally representative respondents in the US between August 25 and August 30th, 2022. The survey was conducted by Opinion Matters, which abides by and employs members of the Market Research Society, based on the ESOMAR principles.
The Customer Loyalty Index shows that customer behaviors are changing, and retailers must be able to fully understand their customers, and deliver personalized experiences, to reap rewards.
Creating the Customer Loyalty Index is just one of the ways Emarsys is empowering brands around the world to deliver truly personalized omnichannel experiences that accelerate predictable and profitable outcomes.
Through innovation, Emarsys brings power to the marketer – with innovative features including Mobile Wallet which allows marketers to launch campaigns using wallet passes, Conversation Channels, which allows marketers to engage customers on preferred chat channels like WhatsApp or Facebook Messenger and Enhanced CDP Integration, which allows marketers to and synchronize consumer identity.
Emarsys has also announced Real-Time Web Personalization, allowing marketers to respond to customer behavior in the real-time with personalized experiences to maximize conversion and revenue, Account Engagement which empowers sales teams with branded, automated omnichannel journeys and accelerate deal velocity to grow lifetime value and CP & B2B Strategies & Tactics to help marketers execute proven, industry-specific automations that improve growth, retention, loyalty, and revenue.
About Emarsys
Emarsys, an SAP company, is the omnichannel customer engagement platform that empowers marketers to build, launch, and scale personalized, cross-channel campaigns that drives business outcomes.
We partner with more than 1,500 companies from global enterprises to fast-moving mid-market brands across industries. Emarsys is purpose-built to give more power to marketers so they can:
- Accelerate time to value by quickly onboarding data and channels to deploy cross-channel campaigns
- Deliver real-time, 1:1 personalization that builds trusted, loyal, and lasting customer relationships with every interaction
- Succeeded with proven guidance to make smart, quick decisions with data-driven insights and analytics
- Produce measurable results that drive predictable and profitable growth throughout the customer lifecycle
