Retailers must prioritise fostering a sense of community as transparency becomes more valuable to consumers than brand loyalty, said Daniele Iezzi, Group Retail Director for the Asia Pacific at Reward Gateway.
In an interview with RetailBiz, Iezzi said the effects of rising rents, cooling jobs and wider economic uncertainty have reshaped consumer habits, making shoppers more cautious and discerning.
“If you’re a renter, you’re finding rental accommodation hard. It’s expensive as well… Now, in the job market, there seems to be slowing down a little bit. Every day, there are more announcements of companies undertaking redundancies,” Iezzi said.
Economic uncertainty drives cautious spending
He explained that despite recent interest rate cuts by the Reserve Bank of Australia, uncertainty remains a feature of the economic outlook.
“While there’s a little bit of light, you know, over the horizon with the most recent interest rate cut and the likelihood of some others, there’s still continuing uncertainty in that macroeconomic environment, particularly with what’s happening overseas with the trade wars,” he said.
Iezzi said more Australians are now feeling the strain and are scrutinising their purchases.
“At the end of the day, it becomes an issue where consumers are scrutinising things more, taking the time to make that purchase,” Iezzi emphasised.
Brand loyalty weakens in the age of empowered shoppers
The shift has weakened traditional notions of brand loyalty.
According to Iezzi, “there’s an erosion of it and that’s manifesting itself in a number of ways, being caused by a number of factors. Certainly one of them is consumers becoming more powerful.”
In the past, retailers held the advantage with pricing and product information. Today, Iezzi explained, technology allows shoppers to compare prices online, seek recommendations from influencers, and access a global marketplace.
Even with strong brand ecosystems like Apple’s iOS, Iezzi said price and value play a pivotal role.
“Apple’s very good at keeping people embedded in the iOS system. But when I’m going to look for it, I’m going to see who’s got the best deal on it, who’s going to give me the best trade-in. And maybe I might look at the returns policy”
“But ultimately, okay, who’s got the best price for me right now? Whereas in the past I might have always gone to wherever I got it the year before.”
Data is only powerful when used wisely
Loyalty programs can still drive value, Iezzi said, but only when retailers use the data wisely.
“They provide the retailer with a lot of data… the ability to access that data and actually use it, find the insights out of it, to understand how their customers are behaving, how the behaviour is changing. That unlocks the power of a loyalty program,” he said.
“Consumers are not loyal to the retailer, they’re loyal to the loyalty program. They want to gamify it, whether that’s retail or airlines or whatever the case may be. But without using that data and the insights, and then acting on it, there’s no point in having a loyalty program at all.”
Iezzi also warned against implementing technology for technology’s sake.
“Let’s talk about chatbots and AI. They’ll give you a huge amount of data, but again, if you’re not, as a retailer, looking at that data and actually understanding what it’s telling you about the customer and how they’re behaving, how they’re interacting with the brand, and then acting on those insights, then it’s useless.”
He said technology should enable staff to focus on meaningful interactions and insights, not replace them.
He pointed to ALDI’s pricing transparency as an example of a retailer owning its limitations and turning them into strengths.
“Let’s say in their marketing campaigns, they actually say, ‘Well, we know you’re going to shop at other places. You can’t buy everything from us.’ So they’ve addressed that; that’s their Achilles heel.”
“But they know that they’re strong on price, so that counterbalances it. They’ve addressed their weakness, they’ve amplified their strength, and I think that’s going to pay off.”
Trust, Iezzi said, is built when retailers balance price, transparency and a sense of belonging.
Trust and community trump price and convenience
He highlighted Mecca as an example of a brand excelling in this space.
“There are some retailers that do that extraordinarily well. Mecca is probably best in class in Australia with that. They’ve got, I think, a quarter of a million members on their Mecca Chit Chat Facebook page. And those advocates for Mecca are also acting as salespeople, answering other members’ questions, recommending products, writing product reviews,” Iezzi said.
“This sense of community is going to trump other factors such as price or convenience. I think there is a trade-off there, and that is probably what’s going to be the strongest one at the moment.”
As customer journeys become increasingly non-linear, retailers must adapt quickly.
“It used to be quite linear: you’d go…I want to buy this. I’ll find a bit of information about it, I’ll go to the store and I’ll buy it. Now…I’ll do a bit of research, but then I’ll see something on my Instagram story that’ll pique my interest. That might opt me to look at a different retailer or a different brand.”
Ultimately, consumers expect more—and they know what’s possible.
“It’s easy now for us to shop from almost any retailer in any country around the world, just from the comfort of our home. So there is an expectation on retailers to lift their game,” Iezzi said.
He added that rising awareness of sustainability and ethics means retailers can no longer adopt a one‑size‑fits‑all approach.
“We’re starting to see more awareness, for example, around sustainability. They’re asking questions about the origin of a product. Not all consumers care, some will turn a blind eye if the price is right. So there’s not a one‑size‑fits‑all approach,” Iezzi said.
“That one-size-fits-all approach that happened back in the 20th century just doesn’t really work or be effective in retail anymore.”