Consumers today have more options available to them than they have ever had in the past. Stores and restaurants are open for business, and online sales have never been better. A 2021 report by McKinsey revealed that consumer shopping has been largely driven by value and convenience. As such, gaining and retaining loyal customers has never been more challenging. Inflation has taken its toll, and customers are looking for an economical, convenient and fast shopping experience that is personalized and offers a human touch. Let’s take a look at the ways that brands are driving loyalty and retention during the upcoming 2022 holiday season.
Holiday Shopping Options and Opportunities Galore
During the pandemic, customers had much fewer options when it came to buying products, groceries and services. Businesses were closed to in-store purchases and dining, and social distancing practices made shopping in those stores and restaurants that remained open for business unpleasant and risky. As a result, consumers turned to online shopping, home delivery, curbside pickup and pick-up in-store. What used to be more of a luxury or occasional method of buying food, clothes, toiletries and other products became a normal way of doing business with a brand.
Although pandemic thinking is still influencing consumers’ shopping habits, customers now have the option of returning to stores, restaurants, entertainment venues and other establishments without a risk to their health, safety or welfare. Customers who missed the social aspects of in-person shopping have been delighted to visit their favorite brick-and-mortar stores once again — but that doesn’t mean they have abandoned online shopping. It’s just that hybrid, aka “phygital,” shopping has become a normal part of their lives, as it offers an even wider assortment of options and opportunities.
Asim Zaheer, CMO of Glassbox, a digital experience analytics platform provider, told CMSWire that brand equity is becoming increasingly important, especially during the holiday season. “With consumer purchase options plentiful and inflation rising, trusted and better-known brands will benefit. Much of the differentiation and brand building is now done online and the digital experience has a significant impact,” said Zaheer, who added that delivering frictionless experiences has become mission critical, as switching brands is easy and customer reviews are so influential today.
By providing an exceptional customer experience, customers will come to expect and depend on the same consistent experience across all of a brand’s channels — and when this occurs, it builds brand loyalty. “Delivering a great web and mobile experience is essential to brand equity in 2022 — as important as price and product,” said Zaheer. “Research tells us over 80% of consumers believe customer experience plays a central role in purchase decisions while they also believe that 10% deliver a good digital experience. There is a great opportunity to improve here and differentiate.”
A recent study by NewStore, a global, mobile-first omnichannel platform provider, revealed that 1 in 3 consumers prefer mobile shopping apps to other channels because they have a better experience on an app versus in-store or website experiences. The report predicted that this year, holiday ecommerce sales will climb 15.5% to $235.86 billion. Rick Berger, president at NewStore, told CMSWire that although the market may be seeing numbers climbing, there are still several factors that will challenge retailers striving to attract and retain customer loyalty through the '22 holiday season.
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Loyalty Programs Still Play a Valuable Role in Driving Loyalty
Loyalty programs play a large role in customer retention for many brands. By providing incentives and perks to loyal customers, they can remain engaged and more willing to continue to do business with a brand. Israel Gaudette, affiliate marketer and link-building expert at IG Marketing Inc., told CMSWire that loyalty programs are designed to reward and encourage repeat business by offering incentives such as discounts, freebies and other perks to those who regularly purchase from a brand. “This helps ensure that customers will come back again and again — and they'll bring their friends with them. It also gives them a reason to shop around for other options if they're unhappy with what's available on offer.”
Much like any other aspect of the customer experience, loyalty programs are just one piece of the puzzle. “This kind of approach works best when paired with customer service training for staff members who interact directly with clients,” said Gaudette. “Staff members need to be taught how to identify problems quickly and resolve them without delay so that customers feel like their concerns are being taken seriously.”
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A Human Touch Can Bring Back the Holiday Spirit
In spite of the proliferation of brands devoted to providing shoppers with a myriad of opportunities, there is an element that is missing from the holiday shopping experience for many shoppers — the human element. Nancy Maloney, associate partner and director of Strategy and Analytics at VSA Partners, a business that’s all about designing a better human experience, is in a unique position to understand how holiday shopping has become just another impersonal purchasing experience.
Maloney told CMSWire that holiday shopping used to feel different than shopping at other times of the year, but now it’s a cookie-cutter experience. “Endless options are served up on any website, driven by algorithms and often fulfilled by robots, haphazardly deposited on your doorstep in a uniform brown box alongside your toilet paper and toothpaste.”
Unfortunately for customers, Maloney said, these well-intentioned efforts to deliver experiences that are the most economical, convenient, and fast holiday shopping have become highly transactional and utterly forgettable. “There's an opportunity for brands to build trust and loyalty by designing a better and more human experience for shoppers, identifying key moments of impact and infusing those moments with thought, care and connection.”
The ways that Amazon accomplishes this is a good example of how to bring the human element back into play, even as a brand operates largely in a digital landscape. “Brands can deliver on these moments to bring delight back to the holiday shopping experience in big and small ways: Amazon sending out their non-digital kids’ holiday toy magazine is a great example of something that creates engagement by sparking a sense of nostalgia for parents and delight for kids,” said Maloney.
The human touch goes a long way toward bringing back the sense of holiday joy that once accompanied gift shopping. “Smaller businesses offer gift lists curated by real people, with options to have presents beautifully wrapped for pickup or delivery,” Maloney explained, adding that curated gift lists make the customer’s selection less intimidating, provide a sense of confidence that the recipient will like it and help the gift-giver feel more thoughtful than selecting something at random.
Related Article: 4 Ways Brands Are Boosting Customer Loyalty
The Economy Is Driving Early Holiday Sales
According to Berger, industry reports show that consumers are shopping early, as only 40% plan to start shopping in the final two months of the year — creating a drop in sales during what has typically been the busiest time of year for most retailers. Amazon, for example, held a holiday discount event in October. Additionally, because retail sales during the holiday season are expected to rise 6.2% year-over-year, this is further incentivizing shoppers to get their gifts sooner. Finally, Berger emphasized that with the steady demand for in-person shopping, some retailers may struggle with supply-side issues like inventory management, all of which influence or detract from customer loyalty and retention.
Sarah Cascone, vice president of marketing for Bluecore, an AI-driven retail marketing platform provider, explained to CMSWire that the holidays are typically a time that shoppers will venture out to try new brands with access to an excess of deals. "But with money tight and prices rising, shoppers will be weighing discounts as much as their past experience with a brand this year, to ensure their money is going toward quality items from brands they trust.”
With this in mind, Cascone said that retailers can’t rely on discounts alone this holiday season to convert shoppers. “Instead, it’s critical that brands maximize their relationships with existing shoppers to keep them engaged through the holidays and beyond.”
Personalization Drives Loyalty During the Holidays
After two years of pandemic ecommerce and hybrid shopping, today’s customers demand and expect a highly personalized shopping experience, both online and in-store. “To drive customer loyalty over the holidays, marketers need to deliver highly curated shopping experiences to customers,” said Cascone. “This starts with being able to identify shoppers, know what they’re searching for, adding to their cart and purchasing, and understand their specific product preferences like size, color, price and style.”
Cascone reiterated that once marketers have the tools to help them uncover who their customers are, how they are interacting with the brand, and what products they’re engaging with, they’ll need to act fast. “There are many tactics marketers can use, but the key is to reach shoppers with what they want, on the channel they want, exactly when they want it. This also means predicting what products shoppers might want in the future — even if they have never engaged with it before.”
Cascone said that the retailers that will increase and retain their loyal customers this holiday season will be the ones that deliver shopper experiences based on individual shoppers and their behaviors. “It’s these experiences that offer value beyond just a product itself — and will keep shoppers coming back.”
Jason Finkelstein, CMO at Gladly, a customer service platform provider, spoke with CMSWire about the importance of personalization and customer service when it comes to loyalty and retention. “While many brands will focus on deals, promotions and more — one aspect that is often overlooked to create a loyal customer is quality and personalized customer service,” said Finkelstein. "Customer service is often the first and only time a customer will interact with a human during their entire shopping journey and this includes during the holiday season — and it needs to be an impactful experience to retain a customer beyond the holidays.”
Customer service also provides brands with an opportunity to help build customer loyalty. According to Gladly’s 2022 Customer Expectations report, businesses are losing $75 billion a year in revenue due to inadequate customer service alone. Finkelstein explained that brands often forget to capitalize on the opportunity that customer service presents — creating a human connection and, as a result, a loyal buyer. “When agents are able to make personalized recommendations based on past purchases and other buyer information, brands inevitably stand out by focusing on a human-first approach during what is a largely digital-first era of commerce,” he said.
Final Thoughts on Adding a Human Holiday Touch
Customers today have an almost unlimited variety of options available when it comes to holiday shopping, both online and in brick-and-mortar retail outlets. While loyalty programs are still relevant for rewarding and engaging loyal customers, adding a human touch to shopping can be a welcome addition to an otherwise unremarkable experience.
Finally, by providing customers with value and convenience along with a personalized experience, brands can enhance customer loyalty and improve the overall customer journey.