Through a special arrangement, presented here for discussion is a summary of a current article from MarketingCharts, a Watershed Publishing publication providing up-to-to-minute data and research to marketers.
A frequent customer is not always a loyal one. That a conclusion of a new study from Cardlytics based on a "whole-wallet" analysis of transaction records held by banks for nearly 70 percent of U.S. households. The research indicates that customers who frequently visit specific retailers tend to be heavy "category spenders", meaning that they also frequently visit other retailers in the same channel. Instead, true loyalty is often the domain of "light customers" who make fewer trips to stores but typically shop at the same ones.
The analysis looked at five retailer channels: restaurants; apparel; gas and convenience; grocery; and general retail. Rather than simply analyze how often customers of these channels visit specific stores (which might be how the stores themselves determine loyalty), the whole-wallet approach based on transaction records looks at how often customers visit stores as a percentage of their total channel visits.
Looking at how customer loyalty differs among restaurants, apparel and grocery:
On the surface, that shows a significant degree of loyalty to favorite stores.
But a deeper analysis indicates that loyalty (defined here as at least 50 percent of category trips made to the same store) is much more prevalent among infrequent than frequent customers of each channel.
In each case, "light" customers (fewer than 52 trips a year) were more loyal than "heavy" customers (130 or more trips). Here's how those comparisons broke out at the extremes by channel:
Obviously, heavy visitors to a channel are going to account for more dollar sales than light visitors — even to particular stores. And in general, the top 20 percent of customers accounted for a greater share of spending in each category (63-69 percent) than share of trips (56-60 percent).
How relevant are frequent visits as an indication of shopper loyalty?