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BizReport : Loyalty Marketing : March 18, 2020

Expert IDs shopper loyalty connection

Returning customers, especially in Q1, may be more important - and lucrative - that retailers knew. According data out from Cardlytics, returning customers who do not lapse as buyers between the holiday season and Q2 are more likely to make additional purchases. Here's how merchants can keep shoppers engaged.

by Kristina Knight

Kristina: What surprised in the 2019 holiday data?

Dani Cushion, CMO, Cardlytics: We saw sales go up a couple of percentage points compared to 2018, which was surprising because so many retailers were really worried about how the shortened holiday season would impact 2019 holiday sales, and numerous big-box retailers have cited the condensed shopping period as the primary reason for sluggish sales growth last quarter.
Though not as big a sales bump as many projected, I think the fact we saw the growth we did was largely driven by shoppers staying hyper-focused on getting gifts for everyone on their list. We saw healthy spend throughout the season with brick-and-mortars, physical stores' e-commerce platforms, and online-only retailers. There were still peaks in spend during the week of Black Friday and Cyber Monday, as well as the week before Christmas. However, spend continues to be pulled earlier and earlier in the season with nearly half of holiday budgets spent in the five weeks before Black Friday and Cyber Monday -- up from 37% in the four weeks before Black Friday and Cyber Monday in 2018.

Kristina: What lessons from 2019 should merchants take forward into the 2020 holiday season?

Dani: With the start of the unofficial holiday shopping season creeping closer to Halloween each year, it's becoming more important for marketers to manage the timing of their marketing throughout Q4 as opposed to focusing their attention solely on Black Friday and Cyber Monday. These retail holidays are still important for merchants to take part in, but, looking ahead to the 2020 holiday season, the retailers that offer the most convenient, customer-centric experiences -- and talk about them early enough so they're top of mind -- will be best positioned to stand out from the crowd and grow their market share.

Kristina: What is the connection between frequency of purchase and true customer loyalty?

Dani: At Cardlytics, from years of analyzing purchase data, and working directly with top marketers to run cash-back reward ads for them in banks' digital channels, we have found that each industry -- sometimes even each competitive set -- has what we like to call a "loyalty tipping point." We would describe this as the number of purchases a shopper has to make with a retailer before they are truly loyal. The holidays are a perfect example of this trend. It's easy to fall under the false impression that shoppers who spend a significant amount of money with a retailer are true loyals. In fact, when you look at the full wallet of how those customers buy, many are simply heavy category shoppers who are also regularly shopping with competitors.
Through our native advertising platform, we have visibility into about 2 in 5 debit and credit card swipes in the U.S. and can therefore see where, when, and how much consumers spend. With this insight, we work with our retail partners to identify just how loyal a consumer actually is, and how much headroom they actually have in their category.

Kristina: How can merchants do a better job of keeping newly acquired, holiday season customers active and buying through Q1 and the following year?

Dani: Shoppers often aren't incentivized to return to retailers directly after the holidays, so Q1 is a crucial time for retailers to re-engage. Well-timed customer acquisition campaigns can attract these shoppers, which will then drive loyalty for the rest of the year. Enticing omnichannel offerings, like free next-day shipping and BOPIS (buy online, pick-up in store) options can help prevent shoppers from lapsing. Post-holiday sales and other promotions can also keep both new and long-time consumers coming back instead of going to the competition.

Tags: Cardlytics, ecommerce, loyalty marketing, loyalty shopping, mobile commerce, mobile marketing

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