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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Canada: Why are consumers so loyal and how can they be courted to a new brand?

Thursday, July 30, 2015 > 09:43:05
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(Globe and Mail)

Take a look in your closet. What do you see?

If you’re like most Canadians, chances are your entire wardrobe consists of items from fewer than 10 brands. While this may be surprising given that the Canadian fashion industry is valued at more than $19-billion annually and is made up of thousands of brands, the fact is that we are more creatures of habit than abundance.

But why are consumers so fiercely loyal?


It’s simple, really. Loyalty has become a modern-day coping mechanism in a retail space that is extremely crowded and hyper-competitive. To the overwhelmed consumer, loyalty makes purchase decisions easier and far less intimidating. However, for the retailers and manufactures that compete feverishly for the hearts and wallets of Canadian consumers, loyalty presents some significant challenges.

One good example of this effect can be seen in the women’s activewear category. According to the NPD Group’s recent Brand Loyalty In Canadian Fashion report, three-quarters of female consumers in this category, 73 per cent, indicate they are loyal to at least one brand.

The significance of this is that these consumers will spend about twice as much on a brand they are loyal to, compared with a brand that evokes little or no loyalty. Furthermore, loyalty isn’t just important when it comes to the initial purchase, but to the entire sales cycle. When it comes to repurchase intent in this category, loyal consumers are about 40 per cent more likely to buy again and again, making loyalty important for both growth and sustainability.

Denim is another category that illustrates the positive correlation between brand loyalty and sales. More than 80 per cent of men claim to be loyal when it comes to shopping for a new pair of jeans. Our report found that men purchased on average less than two different denim brands over a 12-month period and tended to consider themselves loyal to just one brand. Again, repurchase intent was more than 40 per cent for loyal consumers, suggesting that denim purchases are highly motivated by loyalty.

It’s not just the big purchases that are driven by devotion, but also the smaller ones that are rarely seen. In the men’s underwear category, the top three brands collectively capture more than 40 per cent of the market. And while many of us may not think twice about the brand in our pants, research shows that if a man is loyal to a particular underwear brand, he will spend 62 per cent more, on average.

While it’s easy to see that loyalty is an innate driver of purchase, understanding how to build a loyal consumer base is hardly as simple. The brands that are winning in today’s fashion and apparel landscape tend to drive loyalty by focusing on innovative solutions based on who their customers are and what they want. Savvy brands can do their part to shape merchandising and marketing strategies that facilitate the growth of loyalty by considering the following:

The five Ws: To understand the consumer, you must understand the who, the what, the where, the when and the why of his or her shopping behaviour.

The omnichannel: Ensure the consumer has several ways to interact with your brand. Develop a best-in-class multichannel strategy based on the touchpoints that are relevant to the consumer. Ensure the consumer has several ways to interact with your brand.

Test, test and test again: What works to build loyalty today may not work tomorrow. Setting appropriate benchmarks to measure loyalty successes in the changing retail landscape is the key to winning.

Be nimble: To succeed in today’s digital world, you need to be flexible and be willing to adapt and grow.

Don’t quit: Like anything else worthwhile, loyalty takes time to cultivate. Don’t be discouraged and always look for ways to distinguish your brand from the competition.


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