The year 2022 witnessed a significant change in people’s consumption pattern, as the post-Covid pandemic had a negative impact on the world economy, forcing people to spend sparingly. As a result, brands are also changing their business strategies, focusing more on building a long-term and strong relationship with customers.
But this also unintentionally puts pressure on brands in the year 2023, consumers will clearly see those changes as brands are trying to maximize profits. This article will point out customer trends and loyalty forecasts by experts in 2023.
Consumers tighten their budgets
With the cost of living on the rise, consumers are said to be reducing their spending for the new year, especially as energy bills are increasing, arguably the biggest cause of this change. A report among British consumers from Attest indicated that a total of 61% of survey respondents said they were tightening their budgets, while only 18% said they would spend comfortably. “Changes to fundamental behaviors are afoot also. Frugality is on the spectrum between necessary and contemporary. This research paints a picture of consumers trying to react to worsening economic conditions with tectonic shifts in expectations, perceptions, channels and value, meaning brands now more than ever need to be on top of the changing needs and wants of consumers to succeed”- Jeremy King, CEO and founder of Attest.
Brands prioritize emotional relationship and value communication
Advanced technology allows consumers to easily access the Internet as well as various alternatives. As a result, offering high-quality services or products is no longer enough to differentiate a brand since customers will become more attached to brands that share their values. Many brands have used influencers and KOLs to develop emotional loyalty among like-minded consumers. If their target consumers are environmentally conscious, some brands will express this through product packaging, such as green or eco-friendly packaging. Customers will feel a sense of shared values with brands that communicate directly to them through various initiatives. In short, when a customer feels emotionally connected to a brand, that emotional bond encourages loyalty, which can convert casual buyers into long-term loyalists.
Personalization is still the key factor
“Personalization and customer loyalty will be increasingly intertwined — and ethical data use will be more critical than ever.”- Colin Eagan, User Experience Strategy Expert. Brands are able to customize digital interactions across full customer journeys thanks to advancements in personalization technology. Customers are increasingly expecting seamless experiences throughout their interactions with brands. This necessitates the development of personalization programs that meet the expectations of customers. Customers are increasingly seeking consistent experience in their interactions with brands. This necessitates the development of personalization programs that meet the expectations of customers. All of these experiences are data-driven, and the convergence of personalization and loyalty will place a greater attention on data privacy. Delivery platforms like web browsers are expected to become more restrictive with the goal of providing users more control over what they share.
Blockchain will shine
Blockchain technology is becoming more popular and familiar to everyone. Blockchain technology brings many benefits to both brands and consumers. Therefore, 2023 will mark a new era when brands begin to apply blockchain technology to track users points in loyalty programs, according to Lauren Sutherland, Senior Strategist. Particularly in the last few years, the utility of points, the variety of ways in which points can be earned, redeemed, or spent outside a brand’s primary product or service offering has increased. The main cause is brands trying to stay competitive by giving their members more value.
Blockchain generates an immutable and time-stamped distributed database entry for every single transaction ever made, making each transaction and its record easily traceable while also making them irreversible, preventing double spending, fraud, abuse, and other types of transaction manipulation.
Moreover, loyalty accounts with cash-valued points or rewards will be more commonly integrated into digital payments or as a payment method during the checkout process.
United we stand, divided we fall
Consumers expect a lot from brands: offers, deals, rewards, etc. but not all brands can meet all those needs, especially during the economic crisis which makes companies tighten their budget. Therefore, brands have to work together to survive the business. In addition to delivering more values to consumers, partnerships also allow brands to reach new customer groups. It is expected that more brands will adopt loyalty partnerships for their own loyalty programs in order to boost brand loyalty and retention by becoming more integrated into their customers’ daily lives.
The rise of gamification
Similar to blockchain, games are becoming more familiar to consumers, it is not considered as a negative factor like before, especially as it is adopted by many companies in their loyalty programs. Gamification in loyalty programs can optimize the customer experience when it can deliver something new but not boring to them. Gamifying loyalty programs encourages customers to play more to earn more points. This exploits many aspects of human psychology, such as reward-seeking behaviors, natural competitiveness, and the fear of missing out (FOMO). Thus increasing customer engagement and customer lifetime value.
2023 is predicted to be a year marking a major shift in the way brands build customer loyalty. With the economy getting worse, brands will have to find ways to match customers and retain them. No one knows what 2023 will turn out to be, but companies can learn from those changes and focus on customers for future success.