Nearly 70% of consumers agree their loyalty is more difficult for a retailer to maintain than ever before.
While you should be focused on building loyalty with your customers all year, the holiday season remains very important for all retailers.
It’s a chance not only to boost those fourth quarter numbers, but it’s really a huge opportunity to start building relationships with new customers as well as strengthen existing ones.
As the 2019 holiday shopping season unfolds, here are five things we’ll likely see happen in retail and what you can do about them.
1. This Could Be the First Mobile Dominant Holiday
All signs point to this being the first mobile dominant holiday.
Last year more than one third of all e-commerce transactions on Black Friday came from smartphones, up 10% from the previous year, according to a report from Adobe.
When combined with the nearly 10% of sales from tablets, mobile transactions accounted for nearly half of $6.2 billion in online Black Friday sales.
On Cyber Monday 2018, Adobe reported that 47.4% of traffic to retail sites came from mobile. Web visits on smartphones rose more than 22% year over year, and revenue on smartphones increased nearly 40%.
The average person spends more than three hours per day on their phone and these numbers continue to rise.
Consider that since 2011, mobile internet use rose a staggering 504 percent.
There will always be consumers who opt to shop in a store, but the online presence for brands has taken control.
And for many consumers, the convenience of staying home to avoid crowds and long lines trumps anything else during the holiday season.
All these points considered should be a wakeup call for retailers.
Retailers should focus on a seamless omnichannel customer experience.
This seamless experience needs to happen where or when your customers engage with your brand, whether in-store or on a mobile device.
2. The Subscription Economy Can Lead to Premium Loyalty Gifting
Do you remember when receiving a magazine subscription was a wonderful Christmas gift?
Magazine subscriptions have given way to a variety of streaming services.
Given the streaming services “war” that includes Disney+, Hulu, Netflix, Spotify, etc., could premium loyalty program memberships be next in line?
They seem to fit the current culture around holiday gifts.
Just like a Book-of-the-Month membership, a gift of a premium loyalty membership for one year could be very attractive for many consumers.
Wouldn’t an REI Membership for an outdoor enthusiast be just as thoughtful as a membership to Blue Apron for the busy home cook?
Couldn’t a Prime membership be a great gift for the person you know that is always shopping online for the newest gadget? Or even someone who is into music and movies?
Since premium loyalty programs carry an annual membership in exchange for valuable 24/7 benefits, this could very well be an option for holiday shoppers.
As more and more retailers launch premium loyalty programs, we’ll see memberships and subscriptions become popular holiday gifts.
And after a year, that brand could very well have a lifelong customer.
3. The Holidays Will be the Last Stand for Some Retailers
The holiday season annually presents brands with a large opportunity for increased sales. In fact, many brands rely on this time of year more heavily than others.
For many retailers, the fourth quarter accounts for at least a third of their total annual sales.
Holiday sales represent about 20% of annual retail sales each year, according to the National Retail Federation. Typically, hobby, toy, and game stores attribute about 30 percent of their sales from the holiday season.
For companies that rely so much on holiday season sales, but fall short on their projections, they could find themselves in serious fiscal trouble.
It’s important to engage with your customers evenly throughout the year with relevant communication and benefits.
Loyalty programs are one way to show value to customers all year.
Engaging customers throughout the year in meaningful ways creates loyalty that will help retailers cut through the clutter once the holiday season arrives.
Eighty-seven percent of consumers who are satisfied with the special benefits offered by a retailer’s premium loyalty program will likely choose that retailer over a competitor that is offering a lower price.
That sense of exclusivity means members will engage more regularly, buy more often, and provide higher AOV.
Given the huge amount of customer data collected throughout the year, the holiday season is your best opportunity to show that you are listening to your customers.
4. BOPUS Will Be Prominent During the Holiday Shopping Season
Buy Online, Pick Up in Store has certainly gained momentum among consumers and will play a prominent role during the holiday season.
More than half of online shoppers say they are very likely or completely likely to use BOPUS this holiday season.
In Target’s Q2 earnings call, CEO Brian Cornell said BOPUS has been a key source of the company’s momentum.
“In our digital channels, we continue to see the most rapid growth in our same-day fulfillment options, in-store pickup, Drive-Up and Shipt, which together have more than doubled their sales in the last year,” Cornell said. “These options offer speed, convenience and reliability, and as a result, they are quickly becoming the preferred fulfillment choices for our guests.”
Target revealed it will spend an additional $50 million to increase training and hours and employees during the holiday season.
For consumers, their main reasons for using BOPUS are to avoid paying for and waiting for shipping.
5. This Could be the Last Year for National Free Shipping Day
National Free Shipping Day may become a thing of the past since logistics have become more efficient.
This annual one-day promotional event that always occurs in mid-December. About 1,000 online retailers participate by offering free shipping with guaranteed delivery by Christmas Eve.
Once a major pain point during the holidays, free shipping has become table stakes now, especially around the holidays.
Having items delivered and returning items after Christmas are both much easier processes than in years past due to the evolution of the logistics industry.
Best Buy announced it rolled out free next-day delivery, available to 99% of its customers for the holidays, competing with similar offerings from Amazon, Walmart, and Target.
This Holiday Season Could Be a Turning Point
As the holiday season marches on, it will be interesting to see if any of these predictions comes true and become the norm for how retailers manage this time of year.
All signs indicate this could be the first mobile dominant holiday season, so be sure your mobile experience is up to par.
Think about BOPUS and how much momentum it’s gained. It’s even more enticing at this time of year.
And don’t just wait for the holiday shopping season to make sure the experience is the best.
The fourth quarter has always been a crucial fiscal piece of the puzzle for many retailers but focus on building loyalty year-round.
That way, you’re already top of mine once the 2020 holiday season comes around.
Tom Caporaso
Tom, our CEO, oversees the strategic direction of the company with over 20 years of experience in the loyalty and subscription space. When he's not leading in the office, he can be found coaching his kids in sports or watching his beloved New York Yankees or Pittsburgh Steelers.