Loyalty in Fashion Ecommerce
On the 2nd of July, Station10 were proud to sponsor and attend the Fashion eCommerce Summit, hosted at Shoosmiths in London. The event, organised by The Fashion Network and The Ecommerce Club, was an opportunity for those in the Fashion eCommerce space to discuss and hear from experts in the field how to maximise the impact of ecommerce for their businesses.
We sponsored the event to discuss an important topic for all eCommerce businesses – Loyalty. To do this, David was part of a panel of industry experts, made up of Retail Psychologist Kate Nightingale, Matalan’s Paul McDermott and Oliver Bonas’s Growth Marketing Lead Camilla Tress, (and expertly chaired by the Ecommerce Club’s Davina Lines) who all put forward their views on the benefits (and challenges) that loyalty programmes can create for business. Some of the key points discussed included;
Understanding Consumer Behaviour in a Digital Context
One of the fundamental challenges in cultivating customer loyalty is that businesses often view it from their own perspective – tracking metrics such as the number of purchases, frequency, and value. However, true loyalty is shaped within the customer’s context. It can be driven by factors like convenience, habit, emotional connection, experience, service, status, value for money, ethical alignment, constant incentives, or simply a lack of alternatives.
Types of Loyalty in ecommerce
Understanding the various types of loyalty can help tailor strategies for stronger customer relationships:
- Transactional Loyalty: Driven by financial incentives and convenience.
- Emotional Loyalty: Driven by a strong emotional connection to the brand.
- Experiential Loyalty: Based on superior customer experience and service.
- Social Loyalty: Driven by a sense of community or social status.
- Habitual Loyalty: Based on convenience and habit.
- Value-Based Loyalty: Driven by a perception of superior value for money.
- Ethical Loyalty: Based on alignment with the customer’s ethical values.
- Multi-Brand Loyalty: Loyalty split between a small set of preferred brands.
- Inertia-Based Loyalty: Loyalty due to high switching costs or lack of better alternatives.
- Incentivized Loyalty: Driven by structured loyalty or rewards programs.
The Importance of A/B Testing and Continuous Experimentation
Surprisingly, many brands, especially in retail, underutilize A/B testing. It’s a straightforward way to derive clear value and revenue from data. However, A/B testing should not only focus on conversion rates but also explore broader customer questions like loyalty or lifetime value.
For example, a high-impact test on a fashion retailer’s home page revealed a more effective layout for revenue generation, but it wasn’t adopted due to aesthetic preferences. This highlights the need to educate senior teams on the value of data-driven decisions.
Starting a conversion rate optimization (CRO) program focused on loyalty can help test experiences and hypotheses that cultivate loyalty beyond transactions and help segment and understand customer preferences.
Analysing Loyalty in Digital Analytics
Effective use of digital analytics involves segment analysis, cohort analysis, A/B testing, customer journey mapping, and predictive modelling. These techniques can help businesses identify dominant loyalty types, track loyalty evolution, measure the impact of loyalty-building initiatives, and personalize experiences to foster stronger customer relationships.
If loyalty is a challenge you are looking to crack for your organisation, or you are interested in discussing new ways in which you can harness data in this area, please let David or I know.