Holiday Package: New Research Unwraps Holiday Loyalty Behaviours
Looking Forward Forecasts for this year’s U.S. holiday season indicate a moderate increase in sales. Combined November and December holiday sales are predicted to rise 4.1 percent, to $616.9 billion, according to the National Retail Federation — numbers that also portend well for the Canadian market.
To boost sales further at this time of year, retail marketers typically update their loyalty marketing efforts to engage their best customers. Seeking more specifics on consumer attitudes, COLLOQUY recently updated its annual Holiday Loyalty Shopper study, which reached out to 1,000 U.S. shoppers. The survey, with its significant implications for the Canadian market, asked consumers how they plan to use and engage with their retail loyalty programs over the next few months.
Surprisingly, a stronger majority of program members are planning to redeem rewards for their holiday shopping this year: 6 out of 10 respondents indicated they will use rewards for gifting. That represents an 11 percentage-point increase from 2013, a significant jump and one that would have been expected during a period of greater economic duress, as consumers tend to redeem their rewards more when they are tight on cash.
Considering the amount of money projected to be spent in 2014 — north of $600 billion — that 60 percent of consumers can generate a lot of redemptions, so retailers seeking additional foot traffic will simplify and encourage the redemption experience.
One-third plan to maximize rewards
The survey also revealed that more than one-third of shoppers (35 percent) plan their holiday purchases to maximize their loyalty earnings during the period. In addition:
- More than one-quarter (26 percent) of survey respondents said they watch the timing of loyalty promotions and adjust their purchasing to these time periods.
- Twenty percent of total customers adjust their gift ideas based on which products offer significant bonuses and related rewards.
- Forty percent of women and 31 percent of men surveyed said when doing their holiday shopping this year, they will choose retailers that operate loyalty programs in which they participate.
- Considering the promotional volume that erupts each lengthening holiday season, these results make sense. Merchants over the past decade have conditioned consumers to expect big sales and discounts during the holidays, and for many — but not all — that is a hard habit to break.
Gift cards and cash back
Not all perks resonate with holiday shoppers. The loyalty promotions most likely to encourage consumers to shop at a specific store tend to be cash-like incentives:
- Gift cards, coupons, and cash-back offers ranked the highest for encouraging shopping with 52 percent, 49 percent and 48 percent respondents, respectively.
- Special promotions, like two-for-one deals, and reward points followed closely, with 46 percent of respondents each.
- Only 10 percent of shoppers indicated that typical “soft” benefits, such as early access to a product or VIP event, would be a strong incentive this time of year.
- During this busiest of shopping seasons, consumers can look for additional opportunities to capitalize on loyalty and rewards memberships as retailers respond to their interests correspondingly — hoping to unwrap the key to record sales.