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Loyalty – A Big Play for Holiday Shopping and Beyond


While stores vie to win new shoppers, there’s an argument to be made for a shift in focus to an audience they’ve already captured. A new study by Key Ring finds that 55% to 70% of retail sales are being generated by loyal customers.

And there are perks to all those accumulated loyalty points for both store and customer: Loyalty intelligence provider, Colloquy, found that six out of 10 shoppers intend to use points they’ve earned through customer-loyalty programs to save money on holiday gift-buying this year. This year marks a 22% increase in usage of reward points on gift purchases, over last year’s holiday season.

According to Colloquy’s findings, redemption of reward points for holiday shopping will increase substantially among all age groups this year.

Other results from the Colloquy study show that:

• 35% of shoppers plan their holiday purchases to maximize their customer-reward earnings during the gift-giving season.
• 20% of shoppers adjust their gift ideas based on which products offer significant bonuses and related rewards.
• 40% of women and 31% of men say that when shopping this holiday they’ll choose retailers that operate customer-reward programs in which they participate.
• 10% of shoppers say bonuses like early access to a product or event would be a strong incentive to patronize a specific store.
• Gift cards (52%), coupons (49%) and cash-back offers (48%) rank highest among survey takers for encouraging shopping at a specific store.

Loyalty programs can be very effective … if done right. Offering generic coupons and points is not particularly exciting to consumers. Since shoppers have come to use their mobile devices for product and pricing research and comparisons before and after their shopping trips, retailers who utilize this medium certainly seem to have an edge.

One of the biggest users and innovators when it comes to mobile loyalty programs is Starbucks. With such a ubiquitous presence, the retailer’s mobile payment and loyalty app is used by 10 million customers, with an average of 5 million weekly transactions.

The beauty of Starbucks’ program is that it’s more than just a basic loyalty program. Rewards include membership level increments, and accumulation of points that reward redemption in the form of free food, drinks and random prizes regardless of membership level. Its loyalty program is fun, easy-to-use, wallet-friendly, plus it’s seamlessly integrated with its mobile payment system. This is the kind of loyalty program that not only retains customers but because of its very public face and enticements, gains new followers.

Many retailers can capitalize on the success of Starbucks by instituting similar programs with the same effectiveness. Between beacons, push notifications and locally targeted and personalized ads, stores can get shoppers to make that leap from their mobile screen to the physical store.

Capturing Millennials has been a preoccupation of retailers around the world. Three of four women in this demographic are members of one or more fashion-related loyalty programs and 50% of Millennial men belong to similar programs. Their criteria for belonging to loyalty programs are exclusive access to events, products, or content. Access to personal shoppers and expedited checkout were also high on their list. But, one in five Millennials feel that most loyalty programs don’t understand them and believe the rewards offered were not personalized or tailored enough to their shopping habits.

With so much at stake, offering generic coupons and reward points to members won’t cut it anymore. By creating thoughtful loyalty rewards programs, which are geared to reflect the actual desires of customers, stores and brands can collect and use valuable data gleaned to enrich consumer profiles and more precisely measure the success of individual campaigns.

TAGS: retail, retail trends, retailers,
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