eMarketer’s recent study suggests loyalty programs influence many customers as to where they decide to shop during the holidays. In fact, it states that over half of US internet users believe the presence or absence of loyalty programs will affect whether they shop at any given big-box store. Such a finding strongly suggests that loyalty does indeed have a big impact on the shopper experience – after all, why else would so many base their holiday shopping decisions on it?

Retail sales, meanwhile, have always been biased to the holidays – in fact, the holidays’ percentage of annual sales for a retailer can be 30 percent or more, particularly for those selling things customers don’t tend to buy routinely (e.g., many things typically bought as gifts). For those retailers especially, success the rest of the year depends on what they learn about their customers now, during the busiest shopping days of the year.
From a retailer’s standpoint, here are some of the key benefits associated with deploying loyalty at the holidays:

  • You can collect customer information when the most customers are engaging with you. There is never a better time to get a wealth of customer data you can use the rest of the year to intuit what, when and why a customer is likeliest to buy, and then use that knowledge to motivate purchases with timely, personalized incentives: 48% of consumers say that the most critical time to gain their loyalty is when they make their first purchase. A few holidays ago, this strategy was deployed to incredible effect by a retailer who launched their loyalty program on Black Friday and enrolled more than 1 million members in 3 days! This same retailer went on to do over $1 billion in sales, process over 100 million transactions, and register more than 10 million customers.
  • You can get more customers hooked in and responding to your communications. According to Experian, compared to bulk campaigns, email targeted to loyalty program members has 40% higher open rates and 22% higher click rates. A loyalty communication also tends to be the best vehicle for deeply personalized messaging and offers, because members expect this from such a communication. Given the same aforementioned study found that transaction rates and revenue per email are 29% and 11% higher, respectively, this can pay huge dividends all year long.
  • You can help mitigate high-intensity store traffic periods where stores might otherwise be overwhelmed. Through offers and promotions, loyalty members can effectively be incentivized to shop in different ways and at different times; retailers with strong programs can thus use their programs to mitigate customer ebbs and flows throughout the busiest shopping days of the season - which can improve the customer experience for everyone.
  • You can have better control over inventories. Retailers with strong programs can also affect what merchandise is moved and when. And with loyalty promotions, you reward customers for prior purchases rather than hoped for future ones – in this way, loyalty can act as a business lever that balances risk across the organization.

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