More precisely, real 21st century loyalty – the degree to which a brand is seen to meet customer expectations for their Ideal in a category – is a brand KPI that changes before the rest of the brand’s economic structure begins to get better or worse. It’s an early-warning signal that your brand may be in trouble.
J.Crew Ranked #19 out of #20 Brands
The January 2020 Brand Keys Customer Loyalty Engagement Index ranked J. Crew # 19 out of 20 Retail Apparel brands they tracked for sector loyalty. That was down 4 positions from 2019 and down 2 more from 2018. “That’s been the trajectory for J. Crew for nearly a decade.”
By Robert Passikoff
It’s axiomatic – the more loyalty a brand engenders, the better customers behave toward it in the marketplace. That means they buy more more-often and are less likely to switch brands on the basis of promotions or price. With J. Crew’s loyalty status decreasing year-after-year the only thing that surprising is how surprised the category and business press sounded at the announcement that they would file for bankruptcy protection as early as today.
A decade ago J. Crew ranked #1 in the Brand Keys Customer Loyalty Engagement Index, but the loyalty arc has been very clear. It’s true that the pandemic has been an additional setback for the industry as a whole, but in the case of J. Crew it just put extra stress on a brand that wasn’t to loyalty code in the first place.
What Drives Loyalty In The Retail Apparel Sector
Brand Keys uses an independently-validated research methodology that fuses emotional and rational aspects of the categories to measure loyalty. The approach identifies four path-to-purchase behavioral drivers for an Ideal specific to the category, in this case Retail Apparel. For the Retail Apparel category those include:
- Big Brand Buzz/Exclusive Events
- Customizable & Personalized Quality Limited Editions
- Omni-Channel Shopping For Value
- Ethically & Value-Based
These assessments have been proven to be leading-indicators of consumer behavior, identifying in-market activities 12 to 18 months before they appear in traditional brand tracking or corporate balance sheets.
Out of Fashion
It’s been suggested that J. Crew wanted to be a high fashion brand when it grew up but the combination of an overly-intense focus on fashion and taking their eyes off the quality-for-value portion of the equation resulted in a loss of loyal customers.
J. Crew hasn’t been the only Retail Apparel brand that’s in trouble for a loyalty perspective. Based on the Customer Loyalty Engagement Index, brands like Victoria’s Secret (#20 in this year’s loyalty ranking) and GAP (#18). You can’t dig yourself out a loyalty abyss on the basis of low-lower-lowest pricing strategies.
The Secret of Customer Loyalty
And therein lies the secret of customer loyalty: If you meet expectations better than the competition, customers are six times more willing to give a brand the benefit of the doubt in uncertain times. You can’t get any more ‘uncertain’ than the Covid-19 crisis. But you can be certain that brands with loyal customers will survive. Even if they have to wear masks to shop.
Robert Passikoff is founder and CEO at Brand Keys.