Author: Mei Ling Tan

Though many consumers are currently lukewarm about their relationships with brands and retailers, three in four consumers in Singapore will buy more from retailers if they are better rewarded for their loyalty, a study conducted by ICLP finds.

Out of 750 consumers surveyed, only 3 percent consider themselves to be devoted to their preferred retail brands, expressing willingness and desire to forge enduring relationships with them. They also gave average to low scores in terms of passion (brand enthusiasm), commitment (loyalty), and intimacy (willingness to share information with a retailer).

These findings come at a time when Singaporeans’ love affair with shopping and retail has been under strain. Even as retail sales show a modest year-on-year growth of 2 percent as of September 2016, there have been a slew of notable closures in the local retail landscape, most recently that of John Little, one of Singapore’s oldest department stores.

These findings come at a time when Singaporeans’ love affair with shopping and retail has been under strain. Even as retail sales show a modest year-on-year growth of 2 percent as of September 2016, there have been a slew of notable closures in the local retail landscape, most recently that of John Little, one of Singapore’s oldest department stores.

“What we are seeing from our research is that many Singaporean consumers still relate to brands and retailers at a transactional level, so when times are uncertain, they easily resort to the myriad of choices that are at their disposal, often literally at their fingertips now,” said Bruno Tay, Country Manager of the global loyalty marketing agency ICLP, which conducted the survey as part of an international study across nine markets.

“It’s not too late to turn things around, though. In fact, retailers now have a chance to truly stand out if they appeal to the heart too — by approaching communication, reliability, consistency, reward and recognition from a human perspective,” he suggested.

The study asked Singaporean consumers  to rate their retail experience with brands on seven core relationship criteria, namely recognition, rewards, reciprocity, reliability, respect, trust and communication. These were then mapped onto a model based on Sternberg’s Triangular Theory of Love, in partnership with an expert on relationship dynamics Professor Ron Rogge at the University of Rochester in the United States.

Based on the three dimensions of a relationship — passion, commitment, and intimacy, the consumers’ experiences with brands and retailers are then further classified into six types. In increasing order of desirability, these range from empty, liking, casual, romantic, companionate to devoted.

Devoted consumers — who currently form the marginal minority in Singapore — are those most willing to share personal information, opinions and desires with their favourite brands, and are least likely to stray to competitors. Notably, 92 percent of customers that fall into this group would recommend a brand they are devoted to. This is a significantly higher proportion than for consumers in the other types of relationships with their retail brands.

Only 12 percent of customers in a ‘liking’ relationship would recommend a retailer to others, 27 percent in a ‘casual’ relationship, 56 percent in a ‘companionate’ relationship, and 69 percent in a ‘romantic’ relationship.

“The rarity of devotion among Singaporean consumers underlines a sizeable gap and opportunity for local retailers and brands. Devoted consumers are keen to be advocates, so driving this pinnacle relationship can have tremendous effect on retailers’ business through word of mouth and social media sharing,” Tay said.

The research findings suggest that Singaporeans do not just want traditional points-based reward programs, but also personalized rewards. Much like in a relationship with friends and loved ones, they would engage more when they receive genuine gestures that surprise and delight them.

Around 67 percent of Singaporean consumers will buy more if retailers use their data in carefully considered, contextual ways to better understand their individual needs and preferences. This suggests the need for retailers to better leverage data technology and put in place more robust customer relationship management practices.

Another 61 percent of consumers also place an emphasis on the importance of better communication, indicating that they will buy more if brands communicate with them better, in ways that express reciprocity and shared passion.

Within the global context of the study, Singaporean consumers appear to parallel quite closely their counterparts in Hong Kong and Australia, where only 1 percent and 3 percent,respectively are in devoted relationships with brands.

This is in stark contrast with the 21 percent of consumers in India who are devoted to their preferred brands. However, across the nine markets surveyed, including United Kingdom, United States, Brazil, United Arab Emirates, mainland China, Hong Kong, India, Singapore, and Australia, there is broad consensus that a well thought out loyalty programme can help deepen consumers’ connection with brands.

“Thinking about our own personal relationships, we know that people fall in and out of love and friendships — lured by ‘greener pastures’,” Tay said. “Now we know that the same thinking can be applied to brand relationships that are dynamic and ever changing. Retailers looking to build and maintain devoted customer relationships should seek to truly understand the emotional factors that drive consumer loyalty.