Clarus Commerce CEO Tom Caporaso discusses how retailers are still relying too much on the holidays to make up for lackluster sales the rest of the year and how they can look to Amazon to focus on premium loyalty to drive customer acquisition and retention year-round.
(As originally published on NASDAQ on December 22nd, 2017.)
Things haven’t been looking too cheerful for retailers this holiday season when it comes to customer loyalty.
In fact, only 4% of members surveyed in a recent Freeshipping.com study said that loyalty was the top factor in holiday shopping this year and around 40% of members said that they shopped at multiple retailers. In 2013, only 23% shopped around. Loyalty to most retailers in decreasing.
On the contrary, Amazon sure had some reasons to celebrate this year.
To start off, Amazon’s Cyber Monday broke all previous sales records becoming their number one sales day of all time.
That wasn’t a shocker though, as around 76% of shoppers planned to do most of their holiday shopping on Amazon. A whopping 90% of their estimated 80 million Prime members said the same thing.
Walmart came in second place, but way behind with only 8% of online shoppers saying they would mostly stick to the retail giant’s website.
If loyalty is down overall and consumers are jumping around, how is Amazon still setting records and how can retailers get ready to compete in the 2018 holiday season?
The time to get ready is now. Let’s talk about mobile shopping apps.
Amazon didn’t set the only record this holiday season. Overall, mobile commerce was up to $2 billionfor the first time in history. Retailers should be constantly evaluating their shopping apps as consumers become more and more comfortable using them to make purchases.
Amazon’s mobile app is great, which is probably why their mobile Cyber Monday orders increased more than 50% worldwide from last year. It’s convenient and easy for anyone to use, so it’s no surprise that they lead the industry in mobile sales.
Retailers like Amazon understand that more and more consumers are using mobile to shop and are focusing on delivering better experiences to them.
While Black Friday is still a huge day for shopping in physical stores, more and more consumers are opting out of the mad rush and shopping from their couches at their leisure. Supporting this, our own study found that crowds were the biggest turnoff for holiday shoppers this year.
In addition to mobile, retailers also need to think about loyalty, not only as a part of their 2018 holiday strategy, but their overall strategy 365 days a year.
Our own studies have shown that the two factors that Freeshipping.com members valued the most while shopping this holiday season were free shipping and price, hands down. Almost half of all participants said that the huge crowds of people were their biggest turnoff.
Amazon addresses all of those factors. With Prime, shoppers know that for $99 per year, they can get free and fast shipping, easily compare prices, get great deals, and not have to fight the crowds at the mall.
Have you considered launching your own premium loyalty program?
If you haven’t, why not? Amazon Prime members spend $1300 per year compared to only $700 for non-members and Restoration Hardware’s premium loyalty program now accounts for 95% of their sales after less then two years.
Create a program that gives members great benefits like the ones above, all the time, just like Prime does.
If your customers are already invested in your program and the benefits are valuable, they will be more likely to stick with you for their holiday shopping needs.
The most important thing to realize about loyalty around the holidays is that it’s not all about the holidays.
Many retailers are still relying too much on the holidays to make up for lackluster sales the rest of the year. Amazon focuses on premium loyalty as a yearlong, never ending strategy and that’s what every other retailer should be thinking about, too.
The time to start strategizing for the next holiday season is now.