Customer loyalty drops when brands don't innovate - report
Customers are quick to flee slow-to-innovate brands with lagging commerce experiences, with millennials and Gen Z leading the migration, according to the 2022 Commerce Innovation Report from commercetools.
The report found that almost three-quarters (73%) of shoppers will take their business elsewhere if a brands commerce experience does not meet their expectations, and over half prefer modern commerce experiences, defined by evolving customer preferences, payment options, and digital devices. Yet despite all that, 45% of respondents say they only dedicate a minimum amount of their budget to improving or expanding commerce capabilities.
According to the report, nearly three-quarters of respondents (74%) recognise that failure to adopt emerging commerce solutions will negatively impact areas of the business.
Some 40% of respondents say their company's current commerce solutions hinder the sale of their products or services, and 49% of this group feel this issue has existed for over a year.
Over one-third of businesses are struggling with the ramifications of an outdated commerce solution, signifying the impact a lack of innovation has on customer experience, sales, and brand loyalty. And more than half of respondents (52%) said they have decided not to implement a new commerce capability due to budgetary constraints
"With endless options and the power of the internet at their fingertips, consumers are continuously redefining what the ideal customer experience looks like," says Jen Jones, Chief Marketing Officer of commercetools.
"The brands with longevity are the ones that are taking this shift into account from both a technological and cultural perspective, and are evolving to meet customer demands," she says.
"Change is constant in the modern commerce ecosystem. Brands need to be nimble and meet customers where they are. This means having a finger on the pulse of their customers shopping behaviours and adopting the commerce experiences that resonate the best among them.
"Anyone who thinks they can sit still and not evolve amid changing demands will be out of business shortly."
The report says resistance to innovation is driving customers away and damaging bottom lines.
Businesses are beginning to understand that if they do not jump on trends and adopt the technology that enables them to provide these next-generation experiences at every touchpoint, then it will be impossible to remain competitive in today's market, it says.
According to the report, the majority of respondents (70%) said they are most concerned about millennials, a cohort with over $2.5 trillion in spending power, taking their business elsewhere, followed by Gen Z (54%) and Gen X (48%).
Nearly three-quarters of respondents (74%) recognise that failure to adopt emerging commerce solutions will negatively impact their business, and 40% of respondents say their company's commerce solutions hinder the sale of their products or services.
The report revealed only 25% of respondent organisations offer next-day shipping, and even less offer loyalty programs (21%). And despite customers expressing interest in a variety of payment options, less than half offer multiple payment methods, and less than 20% of respondents offer one-click checkout (18%), and even fewer (16%) offer Buy Now Pay Later and cashback (14%).