Amazon's dominance spreads beyond just retail

Amazon has been named by consumers as their standout favourite brand, with retail stalwarts Marks & Spencer, John Lewis, Sainsbury’s and Tesco the others most mentioned. Additionally, the tech giant is no longer regarded as just an online retailer, as Amazon also features across several sectors as the preferred brand – first among retail brands, second among media or entertainment, and fourth for technology companies¹.

However, one in three (33%) consumers also said they did not have a favourite brand or one they are most loyal to and nearly two-fifths of people in the UK (39%) feel less loyal to brands and companies than they did a year ago. According to the DMA’s latest ‘Customer Engagement 2018 – How to win trust and loyalty’ report, conducted in partnership with Pure360 and Foresight Factory, loyalty is changing and the challenge for businesses is understanding what their customers really want.

Discussing what businesses can do to increase loyalty, Rachel Aldighieri, MD at the DMA, said: “Brands must renew their focus on the most important part of their long-term success, their customers. Whether marketers decide to offer more personalised experiences, new loyalty schemes or flexible subscription models, successful brands will be those that can put the customer at the heart of everything they do.”

Consumers change, but stay the same

Customers claim that they feel less loyal, but this may not translate into a change in their behaviour and needs. Year-on-year the figures have remained steady with half of consumers (49%) still falling into the ‘Active Loyal’ group and around one in five (22%) as ‘Active Disloyal’ – with the remainder either loyal through habit or in certain situations².

When it comes to the top five favourite brands, consumers also report feeling genuine loyalty to those brands, rather than this simply being based on convenience or habit. This was particularly the case for John Lewis and Marks & Spencer, with 89% and 88% of consumers agreeing respectively. Interestingly, two-thirds (67%) of people who chose Amazon as their favourite brand are loyal to them for genuine reasons – rather than convenience alone.

Komal Helyer, Marketing Director at Pure360, explains: “Consumer trust in ‘faceless corporations’ is waning, and in its place is a growing preference for meaningful interactions with brands who are perceived as genuine, transparent and relevant. For marketers, the message remains the same: add value to your customer’s lives and stay relevant to their interests or risk losing their business altogether.”

Aldighieri concludes: “We feel like we’re less loyal, but this feeling is belied by our continued support for the brands we know and trust. It’s contradictory, of course, but moreover the issue of loyalty is an increasingly more complicated problem too. Consumers have more choice than ever before, but the key for brands is ensuring they are utilising the data and marketing channels at their disposal to build genuine long-term relationships with their customers.”

“In the post-GDPR era, building long-term trust and loyalty is more important than ever. By looking at loyalty trends across different years, we have seen how many consumers are actually more loyal than they believe they are at heart,” added Scott Logie, Customer Engagement Director, Read Group.

To read more about the DMA's Customer Engagement research, including the full report, visit: https://dma.org.uk/customer-engagement

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Notes to editors

1 – Consumers’ favourite brands (overall and by sector)

2 – Definitions of groups in ‘Loyalty’ segmentation (tracked since 2016):

• Active Loyals: These people tend to stay loyal to brand/shops and sites for both everyday and important purchases
• Habitual Loyals: These people tend to stay loyal for everyday purchases, but less so for important purchases
• Situational Loyals: These people tend to be loyal when making important purchases, but are more flexible and fleeting when making everyday purchases – when it matters most, these people will default to using their trusted brands
• Active Disloyals: These people tend to disagree with the statements and are hence much more likely to be disloyal in their approach to brands