Opinions are divided on them – but the Ugg brand manages to retain its fans even in the crisis.
Cologne Opinions differ on the chunky design of Ugg shoes and boots. Evil gossips claim that Ugg stands for “ugly”. Critics also attest the brand from the Californian Deckers Brands a “Neanderthal charm” because of its characteristic lambskin look.
On the other hand, stubborn fans remain loyal to the clumsy kicks – and new groups of buyers are added. The latest quarterly figures for Ugg show global sales of $448 million – growth of eight percent over the same period last year. “The brand is evolving primarily beyond womenswear,” commented Dave Powers, CEO of Deckers Brands.
In Germany, too, customers are obviously happy with their Ugg boots. This is proven by the “Customer Loyalty” ranking of the market researchers at Yougov.
The study measures which brands from 33 categories were able to increase their customer loyalty the most compared to the previous year. As in 2021, Ugg made it to second place – just behind first-place Dunlop and ahead of Dunkin’ Donuts.
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Felix Leiendecker, head of the Yougov study, appreciates the repetition of the success. “Brands that have already come from a high level have a harder time improving their values than those that are still unknown or have not previously been leaders in customer loyalty.” Numbers are rated higher.
The lambskin shoes from Ugg were en vogue before. In the noughties, testimonials such as Paris Hilton and Britney Spears boosted boot sales. But the step into the mass market proved to be difficult. Around 200 euros for a design that has become commonplace – that was obviously too much for many fans. “Exclusivity goes hand in hand with the appeal of the new,” says Leiendecker. “Brands have an easy time growing in terms of popularity and loyalty at this stage. If this appeal is gradually lost, some customers will turn away from the brand again.”
Stars bring attention
Now the Ugg boots are gaining momentum again. In 2018, superstar Rihanna attracted a lot of attention as an advertising medium. Coincidence also helped with the comeback. Shortly before the global corona outbreak, the company launched “#UGGLIFE”, a campaign that emphasized the value of family life. The brand also focused on clothing for the home, which obviously hit the nerve of the time in lockdown. “While other brands have cut their budgets, Ugg has reinvented itself during the crisis,” says Leiendecker. “Ugg was active at the right time and was able to win new loyal customers.”
Taking advantage of the opportunities presented by the crisis – Dunkin’ Donuts also managed to do this in third place. The franchise chain under the umbrella of the US Inspire Brands operates more than 70 branches in Germany. “Dunkin’ Donuts has suffered greatly from the lockdowns of 2020. The chain’s good performance in the ranking is probably due primarily to a recovery factor,” explains Leiendecker.
Dunkin’ Donuts took the regained momentum with them and opened eight new restaurants in Germany in 2021. The range was recently expanded to include six vegan donut varieties. The coffee is now also prepared vegan with oat milk. The company advertises its new delicacies primarily digitally. A vegan campaign is running on Dunkin’ Donuts’ social media channels.
It’s not just Dunkin’ Donuts that is increasingly relying on digital marketing for customer loyalty. During the pandemic, many companies have opened up online channels for themselves. 82 percent of medium-sized companies and 88 percent of corporations in German-speaking countries are now of the opinion that digital customer engagement already plays a very important role in corporate success. This is the result of a survey by the communications service provider Twilio.
Two thirds of the companies also attest to the growing importance of digital customer contact – and state that they have anchored digital customer loyalty in their corporate strategy. Of these, almost two-thirds report advantages in terms of customer satisfaction, and 46 percent see additional success in terms of customer loyalty. “The pandemic has accelerated digital transformation,” said Thomas Boele, technical director for solution design at Twilio. “Companies are opening up more and more communication channels.”
In fact, according to the Twilio study, 80 percent of companies introduced one or two new communication channels during the crisis. These include, for example, social media at 21 percent, live chats at 16 percent or messaging services such as WhatsApp at 15 percent. Boele sees another trend in this: “The personalization of customer relationships is becoming increasingly important.”
But do the digital messages actually reach the customer? And do they bind buyers to companies? A study by Hello Again proves that this is at least possible with proven loyalty programs. The Austrian company specializes in digital customer loyalty and surveyed 500 consumers in its home country and in Germany. Accordingly, four out of five customers either use a company’s customer card, they are a member of a loyalty club or collect discounts.
Loyalty clubs boost consumption
Collecting loyalty points usually promises advantages such as cheaper purchases or freebies. But 51 percent of participants say they’ve spent more money by joining a loyalty club. A good half of them estimate the additional expenditure at ten to 25 percent. Almost eleven percent of those surveyed stated that they had even spent an additional 25 percent.
The good old plastic customer card to show at the checkout will soon be obsolete in loyalty programs. 76 percent of those surveyed already prefer digital processes. Because you always have your smartphone with you anyway. “Due to the growing acceptance of digital offers, online models will largely replace analog solutions in the future,” says Franz Tretter, CEO of Hello Again.
A campaign by Dunlop indicates that discount campaigns still work analogously. In mid-March 2021, the company promised every buyer of a set of its car tires a refund of 20 euros if they sent in the dealer receipt. Dunlop does not want to comment on the success of the campaign.
However, from this point in time, the data from Yougov reveals a significantly greater willingness among customers to turn to Dunlop again for their next purchase. Every second buyer would currently choose this tire brand again. This means an improvement of 12.7 percentage points compared to the previous year. No brand in the ranking was able to increase its customer loyalty more.
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