3 in 5 would buy more if brands were better at communicating with them.
Global loyalty marketing agency ICLP surveyed 750 consumers in Hong Kong and defined people born in three different generations: Baby Boomers born pre-1965, Generation Xers born between 1965 and 1980, and Millennials born post 1980. It found that although Millennials are the most influential generation, only 2% of local Millennials were ‘devoted’ to their favourite retail brands.
As a majority of Hong Kong Millennials are less committed and passionate to their favourite retailers, brands need a cohesive consumer engagement strategy to improve commitment and passion, and foster devoted relationships with Millennials.
The survey reveals underlying gaps in consumers’ retail experience by modelling brand relationships after the psychology of individual relationships with friends and loved ones. Hong Kong consumers were asked to rate the importance of each factor 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 Lovei, in partnership with an expert on relationship dynamics Professor Ron Rogge at the University of Rochester in the United States.
It revealed that 10% of Hong Kong Millennials are in a ‘romantic’ relationship, compared to 21% of those in Singapore and 28% in China. Hong Kong Millennials, with the lowest percentage in the APAC territories and countries surveyed, are characterised as having high levels of passion and intimacy but no commitment, and are strongly inclined to recommend brands with a low degree of brand loyalty.
Meanwhile, 33% of Hong Kong, 23% of Singapore and 20% of China Millennials are in a ‘liking’ relationship. This type of relationship only has the component of intimacy, which reflects how Hong Kong Millennials have a higher tendency to share and receive information from brands. When it comes to asking for their devotion to a brand, only 2% Hong Kong, 3% Singapore and 9% of China Millennials consider themselves to be devoted to their favourite brands, expressing willingness and desire to forge enduring relationships with them. Obviously brands are urged to improve customer loyalty in order to stay competitive in today’s challenging retail landscape.
Building brand commitment and loyalty
Millennials are seen as an influential generation as they are educated, tech savvy and socially active, and expect real-time response. They shop more frequently and spend more among the three generations. Retailers are keen to tap into Millennials’ potential as brand advocates. Retailers need to understand the importance in converting the 33% of Hong Kong Millennials from a ‘liking’ to a ‘devoted’ relationship with their brand. This can be achieved based on the Millennials’ response to the survey:
· 21% of Hong Kong Millennials value communication tone and manner to capture their interest and continued interaction with a brand.
· 23% think their personal information is important and expect to benefit from providing it to the retailer.
· 61% would buy more if brands were better at communicating with them.
Mary English, General Manager at ICLP, commented: “These findings reveal that retailers in Hong Kong still have some way to go in engaging Millennial shoppers, a technologically savvy generation that more businesses are seeking to court in order to tap into their potential as advocates. Brands need to look into a tightly integrated strategy to drive commitment of Millennials. Some shoppers would feel valued if brands were better at communication, while others may prefer brands to improve visibility across various channels to connect and interact with them, such as using different social media platforms. Retailers need to understand shoppers’ individual needs by leveraging customer data such as response rate and viewership to track purchase preferences. Brands can then use this information to implement a more comprehensive and tailor-made loyalty rewards programme that can fit their personal needs, thus developing long-term trust with their customers.”
Reigniting passion in a brand relationship
The 10% of Hong Kong Millennials in a ‘romantic’ relationship are enthusiastic about their favourite retailer and willing to share information, desires and opinions with the brand. Although “romantic”, they does not shy away from “playing the field” by shopping with other retailers on occasion. The challenge for retailers is to keep them from falling out of love with their brand and in love with others. Retailers should make adjustments to their engagement models to maintain and retain ‘devoted’ relationships with Millennials.
· 17% of Hong Kong Millennials think it is important to have relevant recommendations for products and services from the brand based on their preferences.
· 22% believe it is important for a brand to recognise them with a personalised message, gift or offer on their birthday.
· 69% would buy more if retailers used their data to better understand their individual needs and requirements.
· 77% would spend more if they were rewarded better by their favourite retailer. This highlights the significance of personalised rewards that motivate and encourage customers towards a more ‘devoted’ state.
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