In this article
Customer loyalty has a key role to play in the success of retail businesses. Loyal customers make repeat purchases and are more likely to advocate for your brand, sharing positive reviews and experiences with others.
Many items that we buy such as food and medicine are necessary; however, there are many millions of products bought every day because we want them rather than need them. With so much competition in modern-day retail, businesses are having to work harder and harder to stand out from the crowd.
With consumers spoilt for choice and online buying options giving us access to brands all over the globe, businesses are looking for innovative and effective ways to persuade us to choose them over their competitors, whether that relates to essential items or fun purchases. But successful retailers don’t want single transactions from individuals – they want to capture our attention and make sure we keep coming back to them. To do this, they have to find ways to engage us and pique our interest to create long-term loyalty.
Building long-term customer loyalty in retail has both economic and reputational benefits that can place your retail business above competitors and increase your reach – but how do you go about achieving this? Read on to find out.

Personalised Customer Experiences
Customers want to be treated as individuals and, increasingly, they expect a more personalised experience. The 2021 Inmar Intelligence Shopping Survey reported that 90% of consumers said that a brand’s ability to provide them with a personalised experience had a direct correlation with their spending habits. Put simply, retail businesses that can successfully leverage the power of personalisation will see an increase in revenue.
A personalised shopping experience happens when content is delivered to a customer that is interesting and relevant to them. To successfully customise a shopper’s experience, retail businesses need to successfully capture, collate and use information about their customers. This data can then be used to provide services and recommendations based on a number of factors, such as:
- Past purchases
- Browsing history
- Preferences
- Behaviours
- Demographics
Businesses collect data on customer demographics and behaviour with the goal of sending them personalised offers or recommendations to their email inbox, ensuring that they get offered products that are:
- Relevant
- Interesting to them
- Align with their values
For example, a person who has no children is unlikely to need information about a toy sale, a parent who only shops at your store for older children’s items would have no use for a discount voucher for baby formula, someone with no pet probably won’t attend your pet event.
You can also use these methods to show that you are a caring and compassionate business, for example sending out emails offering customers the opportunity to ‘opt out’ of certain marketing communications based on their family circumstances, faith etc.
Example:
We recognise people have different circumstances and family situations, if you don’t want to hear about our Father’s Day offers, please click here.
Christmas not your thing? Don’t worry, we welcome people of all faiths and none to our store – if you don’t want to hear about our Christmas events click here and we’ll send an email to you in the New Year so you can opt back in to receive our messages.
Using digital tools, retailers can collect and analyse customer data to build profiles of their customers which can be used to increase personalisation at each step of their journey. One way retailers do this is by using first- and third-party cookies on their websites.
First-party cookies can be used for tracking and analytics only on the domain you are visiting. Third-party cookies, on the other hand, can track a user’s activity from one site to another. This is why sometimes when you are browsing for a particular search term you may open another site and be shown an ad related to what you had been searching for. Both types of cookies are useful to capture user data.
Due to global changes in privacy laws and GDPR, internet users now have to give their consent for third-party cookies and Google Chrome announced in 2020 that they will be depreciating the third-party cookie altogether. Rather than relying on cookies, retailers can utilise a range of options available to them to collect and evaluate customer data, such as:
- Customer feedback
- Online forms and surveys
- Email newsletters
- Blog subscriptions
- Online chatbots
- Transaction and purchase history
- Social media
- Website tracking tools
- Social listening
- CRM software
When working with customer data, you must ensure that your practices are ethical and GDPR compliant.
Consistent and Reliable Service
Consistent and reliable service is important in building customer loyalty in retail; this applies to interactions that are online, on the phone or in person.
Strategies to support consistent and reliable service:
- Be organised
- Know your products
- Ensure retail staff are well trained in customer service (train them regularly, promote continuous learning, incentivise employees to go above and beyond)
- Make ‘I don’t know’ become ‘I will find out for you’
- Set realistic expectations
- Sell good quality products and services (it sounds obvious but, fundamentally, if the product or experience you sell is poor, then it doesn’t matter how great your customer service is because customers won’t come back)
- Partner with reputable companies for fulfilment (including manufacturing and delivery)
- Use up-to-date software to process and track customer orders
- Aim to meet or exceed customer expectations
- Timely service (including processing, delivery, response times)
- Follow up
- Provide responsive customer support and complaint resolution
- Act on feedback – positive feedback tells retailers what they should be doing more of and negative feedback gives an insight into what changes need to be made

Technology is at the heart of retail today. According to the ONS, internet sales account for around 26% of overall retail sales so far in 2024. Some retailers conduct their sales solely online via their own domain or using third-party selling sites such as eBay. Many businesses with a physical storefront have an online side to their business as well. If your website is boring to look at, is hard to navigate or the buttons don’t work, customers will quickly go elsewhere.
Tips to support consistent and reliable service on e-commerce platforms:
- Provide multiple payment options (including major credit and debit cards or PayPal)
- Make sure your website is secure and encrypted
- If you are not tech savvy, don’t be tempted to build your own website – to attract and retain customers, you need a website that functions properly and looks professional
- Offer 24/7 customer support (either through agents or using AI powered chatbots)
Good customer service is the key to success across all types of business models, whether you are a home-based business doing drop-shipping or are running a high-end luxury store. If you are running a retail business, it is important that you don’t take customers for granted or become complacent; staff should be trained to keep in their minds the phrase every customer, every day.
Each transaction is valuable to a retailer and every interaction with a customer is an opportunity to build rapport and loyalty.
Building Emotional Connections
Very often consumers make purchasing decisions based on feelings rather than logic. According to Psychology Today, buying new items, such as clothes or gadgets, triggers a surge of dopamine. Dopamine is a neurotransmitter that contributes to feelings of happiness and motivation.
Keen marketers can leverage the power of emotional buying to ‘trick’ people into thinking (or feeling) that they should buy an item. They can do this using various techniques including:
- Classical conditioning – this is where marketers ‘train’ consumers to associate their product with specific cues, by using repeated exposure tactics
- Scarcity mindset – sowing the idea in people’s minds that something only exists for a limited amount of time (this might be either the product itself or a price reduction)
- Social proof – the principle of social proof suggests that everyone else is buying a product or service, therefore you should too
Buyers are becoming increasingly savvy, with some being able to spot the above tactics and others fatigued by constant advertising. Customers don’t want to be bombarded with gimmicky or irrelevant ads that they see as annoying or untrustworthy. Old, tired tactics will fail to hold the attention of many 21st-century customers who will lose interest and scroll on. Building authentic, genuine connections with customers is the key to creating loyalty, rather than using trickery to persuade people to make one-off purchases.
To further connect with customers and create emotional ties, brands use strategies such as:
- Storytelling
- Shared values
- Emotive language (such as sending an email with the subject ‘We’ve really missed you!’ when a shopper hasn’t visited your store for a while)
- Memorable experiences (for the right reasons!)
Storytelling can be done using different channels such as social media, videos, blog posts or even in person. Storytelling is best when it resonates emotionally with the target audience or connects with key current events that affect us all; think climate change, challenging classic standards of beauty or addressing the cost of living crisis. Of course, if you try something too radical you also risk alienating people from your brand – effective storytellers employ social listening techniques and know how to evaluate risk.
Rewards and Incentive Programmes
Rewards and incentive programmes can encourage customer loyalty and increase brand awareness. Each time a retailer contacts a customer by either sending something out in the post or by email, they are anchoring themselves in the customer’s mind.
Rewards and incentives include:
- Offering exclusive discounts or money-off vouchers
- Personalised offers
- Early access to sales
- VIP events
- Chances to win prizes
Although rewards and offers make us feel like we are getting a bargain, smart retailers can actually use reward programmes to encourage spending using clever wording such as:

- Money off X spend
- Free delivery for orders over X amount
- Scan all five vouchers each time you shop to get an exclusive voucher at the end
By using the above tactics, they are incentivising customers to shop more frequently, or spend larger amounts, than they otherwise would. Even with the discounts offered, this can increase revenue, footfall and/or clicks onto their website.
By using tracking tools, retailers can target customers who have not shopped with them for a while and send communication that tempts them to return.
Proactive Communication and Engagement
Proactive communication and engagement are fundamental components in building customer loyalty.
Retailers can take advantage of different methods of direct communication to stay connected with their customers, such as:
- Email newsletters
- Sending vouchers (digital or physical)
- Text messages
- Attractive, eye-catching marketing materials
- A consistent message
- Use national days or key events during the year (Valentine’s Day, Easter, Christmas etc) as a reason to contact customers
Retailers should also allow customers the opportunity to ‘opt out’ of communication. This may seem contradictory to getting engagement, but customers like to feel in control of the communication they receive, and allowing them the means to opt out allows you to contact people who are more likely to engage. Using an opt-out method also allows you to track customer engagement and loyalty. If you start to notice a lot of unsubscribes or engagement dropping off, you can start to make changes and improvements to your communication methods and brand message. You can also offer people the option to state why they are unsubscribing which can give further insight into how your audience feels about the communication they receive.
Community Building and Social Responsibility
Brands want to connect with buyers that share their values and vice versa. Community building and social responsibility play a key role in fostering trust and loyalty amongst your customer base. This may include advertising eco-conscious business practices, campaigns to highlight a brand being against animal cruelty or fair-trade promises.
Being socially responsible can also provide great PR; however, it is important that customers see campaigns or pledges as authentic, rather than simply a marketing tool.
As concerns about the climate crisis grow, sustainability is fast becoming a key driver behind many of the decisions certain demographics of modern-day consumers make. Research by YouGov shows a global uptake towards a willingness to pay more for environmentally friendly products. According to that data:
- 58% of US shoppers and 57% of UK shoppers felt they would part with more cash to buy products that were good for the environment
- Younger generations (Gen Z and Millennials) were most likely to agree with the statement ‘I don’t mind paying more for products that are good for the environment’ in both US and UK markets

According to one of YouGov’s online trackers:
- 43% of people in Britain feel that sustainability affects decisions they make around ‘general household purchases’ a fair amount
- 17% feel it affects their decisions to a large extent
Strategies to highlight commitment to the environment or good causes include:
- Hosting fundraising events
- Offering the option to donate reward points to charities or community organisations
- Partnering with charities or causes for campaigns
- Carbon offsetting
Retailers should never underestimate the power of customer loyalty. To attract and retain customers, you need to make a proactive effort to make them feel valued and use strategies that influence their choices so that, time and time again, they will choose your business over your competitors.
Key strategies for building customer loyalty in retail include staying up to date with current trends, providing customers with personalised experiences, building emotional connections and delivering first-class customer service and support. To succeed in retail, you should never underestimate the power of your complaint resolution service and act on any feedback you receive (good and bad) to make necessary changes to your business practices.
Tailored rewards programmes can increase brand awareness, provide advertising opportunities and incentivise customers to make repeat purchases. As well as giving back to customers, increasingly, consumers (particularly in the West) are expecting businesses to give back to the local community or work in an eco-conscious way.
Retailers who make a genuine commitment to good causes or sustainable practices attract consumers who share their commitments. To secure the loyalty of eco-conscious consumers, retailers need transparency and authentic promises that can be tracked and measured. Beware of using sustainability as a marketing tool if your business won’t stand up to scrutiny – this can cause reputational damage. An authentic promise to work ethically, minimise environmental damage or work more sustainably can increase customer loyalty in retail; however, just make sure you have done your research first.