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February 16, 2013

by HoosOnBrand

Retailing In Focus

RetailWire panelists commented recently on whether price or assortment is more important as a driver of customer loyalty. I argue (below) that so-called “loyalty programs” are merely incentives to cross-shopping, not to true commitment to a retailer. Here’s my point of view, focusing on Amazon’s track record:

Why is Amazon successful? Is it because they are the price leader in so many e-commerce categories? Or is there something more? I would argue that their success has a lot more to do with breadth of assortment (which makes sense for them) and customer service than simply price. It’s possible to “over-curate,” as Walmart learned the hard way a couple of years ago.

The entire subject ties back to some recent panel discussions about loyalty programs, which are for the most part “extra discount” programs. Again, exceeding expectations for service and execution are equally key.

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