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Paving a new path to growth with loyalty

Paving a new path to growth with loyalty

​Millennials, showrooming, and ever-changing technology platforms all lead to a landscape where retailers find themselves in a low-growth world.​ Annual growth rates in retail sales appear stuck under 3 percent—well below the 5 percent+ levels that used to be common. Cost-cutting can be part of the response, but retailers cannot prosper unless they keep winning and satisfying customers.


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Customer loyalty is a proven way to not just sustain market share, but to grow it. In most mature brands, over 85 percent of growth comes from their most loyal customers. People who are already enthusiastic about buying a particular brand are a prime market for that brand’s new products. After all, who is more likely to buy a new breakfast cereal or moisturizing cream than consumers who already prefer other food and skincare products from the same brands?

Most retail executives know they have to focus on customer loyalty as they transform their companies to face new technologies, customer behavior, and competitors. But few companies are actually taking action. In KPMG’s 2016 Global Consumer Executive Top of Mind survey, 90 percent of respondents said they are worried about customer loyalty, but only 24 percent said building and sustaining customer loyalty was in fact a top ten priority.

That disconnect leaves room for opportunity—and for many companies, optimizing loyalty programs can provide a way forward. KPMG recently conducted a survey of 700 consumers to understand how they currently view loyalty progra​ms and where the opportunities exist for improvement. The results show that loyalty programs are still a major influencer on consumer purchase decisions and can be a useful tool for growth, but they must be kept current.


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