Consumer Loyalty: What Three Retail Loyalty Leaders Have In Common

The Brand Keys 2017 Consumer Loyalty Leaders List confirmed that Apple, Amazon, and Nike all prove to be loyalty leaders, claiming the #3, #1, and #12 spots respectively.

 Even running a simple Google search reveals Amazon’s dominance in the online retail space. Simply passing by a tv or bus stop ad clearly demonstrates Apple’s prevalence in the tech retail space. It’s highly unlikely even a five-year-old child wouldn’t be able to identify that infamous Nike swoosh. Consumers are quick to purchase new iPhones, opt for Nike over other athletic brands, and check Amazon first for everything on their shopping lists. Why is that?

Well, for Apple, it could be product quality. Sure, the iPhone may be “the best on the smartphone market” and sure, the Nike Free Train might have the best arch support for running or hitting the gym, and sure, Amazon may have the fastest shipping and highest-quality product selection. But are those things true? Maybe, but not always.

Consumers have picked these products because for as long as they can remember (save for Amazon), they have been the best. And the sometimes the more expensive of their industry. Is there a price-quality correlation? Do consumers’ minds inherently associate price with quality?

Maybe, maybe not. But what does ring true for all three brands is the customer experience associated with them is what drives brand loyalty.

Amazon & Consumer Loyalty

Amazon’s brand and it’s customer service have become one in the same. From Amazon’s Prime account option (a loyalty program in and of itself) to it’s 0.16 cents strategy, where customers are credited the price difference if a previously purchased product’s price drops, Amazon puts the customer first, placing the retail giant above all other retailers in the loyalty space. Prime is a loyalty program that customers actually pay to participate in. Seems unheard of, no? Not anymore. The simple promise of free shipping in exchange for $11/month has transformed the loyalty game and created shockingly high numbers. The number of active Prime members went from 63 million in mid-2016 to 90 million in September 2017.

Amazon developed Prime with customer needs in mind–namely shipping costs as the most glaring pain point and barrier to repeat purchase. These member numbers are high despite the fact that the average Prime member spends more than a non-Prime member. They are paying for the tailored experience. Amazon uses data-driven insights to create and repeat individual, customized, customer-centric experiences. The difference is clear: Amazon knows their customers and pushes forward with them, their needs, and their behavior as key drivers of strategy.

NIKE & Consumer Loyalty

Nike began building its brand on experience as early as the 1980s. Nike shoes were intended for the athlete in everyone, at the precipice of the fitness wave that transformed exercise from a hobby to a lifestyle. Leveraging the American fitness culture shift of the 1970s and 1980s, the athletic brand presented its products as athletic wear that works for everybody. As co-founder Bill Bowerman said, “If you have a body, you are an athlete.”

One of the most profound early positioning efforts leveraged Michael Jordan (the man who could fly) and his ability to jump: it sounds simple, a basketball player who jumps is nothing new. Nike used the celebrity endorsement to assign an association between a shoe and the unthinkable act of metaphorically flying through athletic performance. In Twenty Ads That Shook the World, James B. Twitchell wrote of Nike’s Air Jordan ad campaign (running from the 1980s to 1990s), “naturally, whatever provides liftoff is ripe with magical meaning, even if it is just a smelly sneaker.”

SO HOW DOES NIKE MAINTAIN BRAND LOYALTY TODAY?

In 2016, Nike topped the list for most intimate brand relationships among 18-year-olds to 34-year-olds. The list is one measure of a brand loyalty survey and includes brand-consumer relationship qualities like fusing, fulfillment, and nostalgia. Fusing is a term used to capture “when a person and a brand are inexorably linked and co-identified. In this stage, the identities of the person and the brand begin to merge and become a form of mutual realization and expression.” Why is this?

Nike uses B2C interaction to monitor consumer preferences and that data collection translates to the in-store customer experience. The data collected creates incubation, innovation, and development to respond to evolving consumer demands. Nike also transposes that experience online as consumers browse and interact digitally with the brand.

According to CEO and co-founder Phil Knight, the company realized a change of positioning was required after a bad decision to focus on casual shoes. The company shifted focus from manufacturing and product design to the brand itself and the individual consumer.

Apple & Consumer Loyalty

Apple marketed its first computer with a shockingly simple magazine print ad with minimal, bold copy, a single image, and zero calls to action or offers. So why’d it sell? Apple didn’t sell a computer in the beginning. It sold an experience, a status, a lifestyle. And the company backed those things up with a customer service strategy designed around the customer and the customer’s needs. Apple used customer information to innovate and design the next model specifically for the customer’s needs.

All three brands have one thing in common: focus on the customer. Brands that focus on the customer and provide an engaging experience are those that manifest loyalty. Those are the brands that create a two-way conversation and provide customers with a desire to reciprocate and return again and again.

This post was originally published in January 2018. It was updated in February 2020.