Consumers, it turns out, can be bought. In fact, the key to achieving a really loyal customer base is to save them tons of money. Most shoppers will take saving cold, hard cash over superior customer service practically every day of the week. Those are the findings of the 2010 Colloquy Retail Loyalty Index, where Walmart came out on top as the retailer to which most shoppers pledged their current loyalty.
"With the recession acting like a second-stage booster rocket, Walmart has upended the status quo among its national retail peers by chewing into their last remaining frontier: customer-professed loyalty, at least for now," wrote Kelly Hlavinka, a Colloquy partner and author of the report. "The glimmer of hope for retailers is that as jobless rates go down and consumer confidence returns, retailers may very well regain their footing if they continue to work towards customer-centric solutions and more sustainable strategies rather than combating Walmart on low prices."
Colloquy surveyed 3,500 consumers in five regions across the country. Responses were tracked in four retail categories, including department stores, grocery, mass merchants and personal care.
In last year's report, Costco achieved the highest customer loyalty in three of five regions under mass merchants. The warehouse club chain ranked first in nine of twenty categories defined by Colloquy.
"Customer service, store environment, and a wide product selection were the underlying factors for customers' self-professed loyalty (before) ...Two years later, customers view loyalty differently. We've witnessed a profound change among consumers since the recession hit: low prices have stepped up to become retail's strongest loyalty lure, according to consumers. That is something which was simply not true in 2008," according to Ms. Hlavinka.
Discussion Questions: Has the definition of customer loyalty changed in recent years? Are the factors that put Walmart at the top of the Colloquy Index changing as we speak? Do you think Walmart will be at the top of the 2011 list?