As we wade deeper into the all-important holiday shopping season, many businesses are still adjusting their marketing strategy in search of ways to best connect with consumers, drive foot traffic, and boost sales. Although Black Friday will provide ample opportunities to attract shoppers, this holiday season will be less hyper-focused on a single shopping day and more on an entire season of spending. That’s a good thing if you haven’t thought through your incentive and reward strategy just yet or if you’re looking to pivot.
Shoppers will take their time finding the right gifts and deals this year. Smart incentives and versatile rewards will capture their hearts and attention while also helping them maximize their holiday shopping budgets. They’ll also help you drive checkouts, increase basket size, and capture long-term brand affinity and engagement well into 2024.
Based on our research and unique insights into shopper behaviors and trends, here are this holiday season’s favorite reward types that will resonate most with consumers:
- Cashback, Points, and Miles: Cashback, loyalty points, and frequent flyer miles continue to be in high demand due to their tangible benefits and ability to offset holiday spending. Last year, card-linked offers — which allow consumers to register debit or credit cards for offers and rewards that are automatically received once the customer has made a purchase — were especially popular, starting with Black Friday weekend. Customers appreciate the opportunity to earn rewards while shopping and look forward to redemption opportunities later.
Travel-centric rewards are more alluring than ever this year. Last year, our data found a staggering 97% year-over-year increase in travel spend through customer engagement programs over Black Friday weekend. With consumers continuing to show a strong desire to explore, plan, and book their trips well in advance, we expect a similar pent-up demand leading up to this holiday season. Businesses that can offer opportunities to earn and redeem points and airline miles for flights, hotel stays, and car rentals will align perfectly with consumer preferences. Special rates for bundled flight and hotel bookings are also becoming increasingly popular, providing shoppers with the ultimate value-added incentive.
- Opportunities to Earn and Spend Points: Empowering customers to accumulate loyalty points while holiday shopping and then redeem them for meaningful rewards is a smart tactic for encouraging repeat brand engagements and checkouts.
Last year, our research found a 20% year-over-year increase in consumers using reward programs to shop over Black Friday weekend. With economic challenges continuing to take a toll on household budgets, savvy shoppers will seek out opportunities to spend and earn points this holiday shopping season en masse.
- Seasonal Offers: Many shoppers are going to want the same things they’re buying for their friends and loved ones. Tailored seasonal offers for popular gifting choices like food and beverage, travel, health and beauty, luxury, electronics, and tech categories will do well this holiday season.
Maximize your incentives and rewards strategy by offering a spectrum of deals and promotions for the categories above that will be trending — but keep in mind you don’t necessarily stick to one particular reward option. Just like customers’ interests vary, so do their reward preferences. Consider providing reward flexibility, variety, versatility, and choice via traditional options like discounts and product redemptions, but also offer popular options like gift cards or cashback. You can even nurture the spirit of the giving season by offering the option for people to donate their rewards to charity.
- Personalized offers. Crafting offers and rewards that are tailored to individuals’ preferences has become the gold standard for enhancing customer experiences and fostering increased brand engagement. By leveraging innovative and available new technology, especially AI, businesses can provide customers with personalized incentive and reward recommendations based on analysis of past brand interactions, purchase history and other shopping behaviors.
While personalized offers are especially valuable during the holiday season, they can also be the gift that keeps on giving year-round. After interacting with new or existing shoppers this holiday season, leverage the opportunity to tailor future interactions and communications accordingly, such as sending personalized product recommendations, reminding shoppers to use the rewards they earned during the winter holiday shopping season, or thank them for signing up for a loyalty program.
Given the ongoing state of the economy, increasing cost of living and other financial burdens people are experiencing, it’s a safe bet that this holiday shopping season will again provide merchants with ample opportunities to attract customers with the right incentives. Smart, tailored, well-timed deals and offers this holiday season can help cultivate lasting customer loyalty and customer lifetime value long after the holidays are over.