While brand loyalty remains fickle in the cosmetics industry as brands compete on innovation, creativity and diversity, ICLP claims that only 3% of Singaporean consumers consider themselves devoted to their preferred retailers.
However, most of those asked would increase their purchases if better rewards were on offer, based on tailored consumer understanding and communication.
Achieving brand loyalty
Of the 750 consumers asked, 3 in 4 said their spending habits with retailers would increase if they were rewarded for their brand loyalty.
The majority of Singaporean consumers surveyed scored low in terms of their passion, commitment and intimacy towards retailers, indicating the lack of brand enthusiasm, loyalty and shared information between brands and shoppers.
In September 2016, latest retail sales figures show that despite a 2% year-on-year growth, 2016 has seen many renowned brands in Singapore close their brick-and-mortar stores. John Little is a recent example. As one of the oldest department stores in Singapore, its closure reflects the country’s changing retail market and calls for brands to optimise their loyalty and communication strategies.
"What we are seeing from our research is that many Singaporean consumers still relate to brands and retailers at a transactional level, so when times are uncertain, they easily resort to the myriad of choices that are at their disposal, often literally at their fingertips now," said Bruno Tay, Country Manager of the global loyalty marketing agency ICLP.
"It's not too late to turn things around, though. In fact, retailers now have a chance to truly stand out if they appeal to the heart too -- by approaching communication, reliability, consistency, reward and recognition from a human perspective."
Increase devoted consumers
The study highlights that devoted consumers, which currently make up a small minority of Singaporean shoppers, are eager and happy to share personal information, opinions and desires with their preferred brands.
As devoted consumers are least likely to choose a competitor's product and 92% of devoted consumers would recommend their favourite brands to others, these consumers act as brand ambassadors, maximising interest through positive word of mouth.
"The rarity of devotion amongst Singaporean consumers underlines a sizeable gap and opportunity for local retailers and brands,” Tay went on to say.
“Devoted consumers are keen to be advocates, so driving this pinnacle relationship can have a tremendous effect on retailers' business through word of mouth and social media sharing."
Personalisation leads to loyalty
ICLP’s research findings indicate that to increase brand loyalty and the number of devoted consumers, brands must understand their target audiences and communicate with their existing customer base.
As traditional rewards-based loyalty programmes have become a primary customer retention strategy for brands, large and small, Singaporean consumers are now seeking personalised rewards that strengthen their relationship with brands and retailers.
The survey revealed that 67% of Singaporean consumers will buy more products if retailers are sensitive with their data and fully understand it within the context of their brand identity, the psychology behind product selection, and most importantly, the individual needs of their buyers.
To achieve this, companies should focus on improving their data technology to maximise the quality of information they receive and manage customer relationships with a better understanding of the consumer landscape.
Of those asked, 61% of consumers highlighted the need for improved communication. Therefore, in order to create a buzz around brands and products, retailers should ensure that their marketing and promotional activities are frequent and targeted to gain insight from consumers that doubles as market research and generates loyalty.
"Retailers looking to build and maintain devoted customer relationships should seek to truly understand the emotional factors that drive consumer loyalty," Tay said.
Brand allegiance throughout APAC
Singaporean consumers are similar to their Hong Kong and Australian shoppers when it comes to devotion, as only 1% and 3% respectively are in devoted relationships with brands.
When it comes to directly appealing to the individual needs of consumers, APAC brands should look to India, where 21% of consumers are devoted to their favourite brands.
Throughout the nine markets surveyed, which include mainland China, Hong Kong, India, Singapore, and Australia in APAC, the key takeaway is that a sophisticated and personalised reward programme can help cosmetics and beauty companies build a relationship with its customer base.