Jill Dougan is UK managing director at advertising and technology company Cardlytics
Fashion retailers are forever seeking the magic ingredient that will give them a loyal legion of customers. At high-end fashion houses the solution typically manifests itself as an it-bag, a reinvented wardrobe staple a la Diane von Furstenberg and the wrap dress, or exclusive rewards and experiences for the best customers. And these often work.
But for fast fashion, where budget is of greater concern to brands and customers alike, alternative options may be required. While it may not sound as exciting as the latest on-trend sandal, part of the answer lies in data.
High street retailers are getting better at tracking their customers’ spend data, but they only have sight of how shoppers spend with them. Most remain clueless when it comes to how much their best customers spend with competitors.
Such data is enlightening; promiscuity is rife across the fast fashion sector. Cardlytics data analyses the ‘whole wallet’ spend of more than 10 million UK shoppers. We looked at a representative retailer in each fashion category and found that the typical fast fashion shopper spends 70% of budget with their favourite shop’s rivals.
More than a third of fast fashion shoppers (34%) aren’t loyal to one brand, which we measure as those who spend less than 30% of their budget with one retailer. In contrast, for high-end retailers, only 1.3% of their shoppers aren’t considered loyal.
The picture is even more enlightening when you delve deeper into the data. A brand might assume it can count on its best customers to be highly loyal. However, for fast fashion brands, the top 20% of customers by spend are the most fickle of all fashion shoppers. These customers spend nearly half (48%) of their fashion budget with competitors.
Compare this to the best shoppers at typical mid-range fashion retailers, who spend only 27% of their budget with rivals, and it tells a dramatic story. But consider premium designer spenders and it becomes even starker. High-end shoppers spend just 19% of their budget with rivals.
With all this data at their fingertips, fast fashion retailers should look at loyalty in a different light. Lower prices mean fast fashion customers will always shop around, but it is time for the high street to look to the designer fashion houses, not just for design inspiration but also to encourage customer loyalty.