Many brands struggled during the COVID-19 pandemic and economic shutdown in the first half of last year. But there are strong signs that this year’s holiday season will be much improved for loyalty marketers.
Estimates call for a 6.6% increase in in-store sales. Apparel sales — both in stores and online — are expected to jump 46% between Nov. 1 and Dec. 24 compared with the 2020 holiday period, according to Mastercard SpendingPulse.
Given increased consumer expectations with a focus on convenience and value, we wanted to find out how consumers view the upcoming holiday shopping season – and share the insights brands can use to formulate their strategies.
So, just how are loyalty programs going to impact the 2021 holiday shopping season?
1. Sixty-one percent of consumers have joined a loyalty program to get discounts for holiday shopping.
While experiences, contests, and sweepstakes are highly important elements of consumer engagement, your customers still love discounts. The data shows this is true for the holiday shopping season as well.
In fact, most consumers say they joined a loyalty program to get discounts for holiday shopping.
And 68% of shoppers cited product discounts as the No. 1 benefit they’d like to see from their loyalty program memberships during the upcoming holiday shopping season.
Remember that consumers are looking to save money during the holiday shopping season. Make sure these special discounts are not only visible to existing program members, but also to non-members.
For example, showing member vs. Non-member pricing on your website, in-store, or in print can encourage more signups to your loyalty program – even throughout the year.
2. Consumers value product discounts, expedited shipping and better return policies the most from loyalty programs during the holiday shopping season.
There are various benefits that consumers want to see in your loyalty program during the holiday shopping season, but the data shows three that stand out: Product discounts (68%), special expedited shipping (45%) and better return policies (27%).
The fourth and fifth most requested loyalty program benefits for holiday shoppers were free samples with purchase (24%) and exclusive access to member events (21%) like special Black Friday hours.
Consumers typically look at price first so offering discounts will attract shoppers during the holiday season. Special expedited shipping has become almost a staple for brands, and something consumers expect.
Expedited shipping and better return policies are crucial to have and offer your loyalty program members during the holiday shopping season. With most consumers doing their holiday shopping online this year, expedited shipping becomes exponentially more important for your brand.
And as much as consumers want their purchases shipped as fast as possible, your return policies should be simple and seamless as well. Many consumers shop earlier and earlier each year for the holidays, but there are still those who wait until the last minute and still expect these great benefits.
Brands prepare all year for the holiday season but make sure all your processes are smooth and user-friendly as early as possible this year, considering the amount of shopping from October through Black/Friday and Cyber Monday.
Make sure your brand includes these benefits in your loyalty program as you plan for the holiday season.
3. Eighty-one percent of consumers shop with brands during the holiday season because they are members of their loyalty programs.
Most consumers shop during the holiday season with brands where they’re members of their loyalty programs. They do this not only because they’re loyal to your brand, but they also expect to see some great deals during the holiday season.
According to the 2021 Premium Loyalty Data Study, we found that 73% of customers shopped more with brands whose premium loyalty programs they were part of, and 41% shopped significantly more. This data shows that this holds true for holiday shopping as well.
Loyalty boils down to consumers engaging with your program because it has value. If you provide consumers with an abundance of value throughout the year, your brand will be top of mind when the holiday season arrives.
4. Eighty-two percent of consumers start their holiday shopping in November or earlier.
Most consumers start their holiday shopping by November.
In fact, 23% started either before or in September. Twenty-six percent start in October, while 43% start in November either before or on Black Friday.
These statistics show that most consumers are shopping earlier. This means that brands must make sure they’re prepared to meet this demand, especially with more consumers shopping in stores this holiday season.
As more people get vaccinated, and more businesses reopen in the next year, brands will need to get an earlier jump on their loyalty strategies for 2022.
5. More than 55% of consumers save their loyalty points during the year and use them during the holiday shopping season.
This statistic is quite interesting and seems like one where brands could spark even more interest in their loyalty programs before the holiday season.
Since so many consumers accumulate their loyalty points throughout the year, it makes sense for brands to hold more events just before the holiday season. Brands could offer double points or special gifts to customers who reach certain point thresholds.
This could impact customer spend and heighten engagement levels with your loyalty program.
6. Seventy-six percent of consumers will complete most of their holiday shopping online this year.
Consumers spent $791.70 billion online with U.S. merchants in 2020, which represented a massive 32.4% increase over 2019, according to U.S. Department of Commerce figures.
We might be in store for similar numbers at the end of 2021.
It appears consumers will do most of their holiday shopping this year online. Consider these numbers from our survey:
- 52% of consumers will shop mostly online with a few things picked up in-store
- 18% of consumers will shop mostly in-store with a few things picked up online
- 11% of consumers will shop online only (mobile app)
- 9% of consumers will shop online only (desktop website)
- 4% of consumers will buy online and pick up in-store (BOPIS)
- 3% of consumers will shop in-store only
It’s important for brands to ensure their online experience is seamless and easy-to-use for consumers this holiday season. Also, brands need to make sure the BOPIS process is smooth and accommodating.
And even though a much smaller percentage of consumers plan to shop mostly or only in-store this year, that still represents a massive number of people. Brands need to make sure their stores are safe, clean, and well-stocked.
7. Seventy-seven percent of loyalty program members will spend more with those retailers during this holiday season.
Another clear indication that your loyalty program is a major motivator for consumers during the holiday season: More than 77% of loyalty program members will spend more with those retailers this holiday season.
According to our 2021 Premium Loyalty Consumer Data Study, 68% say their loyalty is more difficult for retailers to maintain than ever before. So, it’s imperative that you have a strong loyalty program full of value during the holiday season.
Consumers will have a million choices this holiday season. Why should they shop with your brand? What makes your brand different than your competitors?
It’s not enough to have a loyalty program. To truly differentiate, your brand has to offer a lot of compelling value to attract customers.
8. Nearly half of consumers will provide necessary information to join a loyalty program during the checkout process.
Forty-nine percent of consumers would provide the necessary information during the checkout process to join a loyalty program with the intention of remaining for the long term.
That’s good news for brands because it means you’re offering a compelling loyalty program. This will allow you to collect valuable data to make the experience better and increase engagement.
With the end of third-party cookie data coming in 2023, brands will rely on first- and zero-party data.
There will be a huge emphasis on leveraging first-party data, especially to support member segmentation and activation, after third-party cookies are gone.
Twenty-eight percent of consumers would enroll in the program during checkout with the intention of unsubscribing at some point in the future. This shows people are willing to sign up for your program, but don’t believe in its long-term value.
This gives brands opportunities to demonstrate the program’s value.
Twenty-four percent of consumers say they always decline the offer to enroll during checkout. This means that some brands need to get more creative in how they are asking customers to sign up. Invest in in-store associate training and have compelling online offers, easy mobile signup, self-signup kiosks in-store, and better in-store signage can help.
9. Consumer electronics top the list of items most consumers will purchase this holiday season.
Consumers will spend on various items this holiday season, topped by consumer electronics (38%).
Other types of purchases consumers will make include:
- Children’s entertainment (toys, board games, books) 31%
- House goods (appliances, kitchenware) 29%
- Books and art (23%)
- Beauty and cosmetics (20%)
- Luxury clothing (20%)
- Outerwear (19%)
- Personalized items (19%)
- Athleisure (15%)
- Subscription boxes or services (10%)
- Furniture (7%)
It’s always important to listen to and understand your customers’ expectations.
This is critical before the holiday season. Listen to your customers and make sure your product selection matches their desires.
10. Eighty percent of consumers are more likely to sign up for a retailer’s loyalty program during the holiday season if it means they will earn additional discounts throughout the year.
This statistic speaks directly to the importance of having a strong, engaging loyalty program heading into the holiday season.
Loyalty programs are obviously important any time of year, but the impact brands can make with them during the holiday season is immense. Consumers who join a loyalty program during the holiday season want to remain members throughout the year.
Although all the data shows the importance of loyalty programs during the holiday season, they can have a huge impact on engagement throughout the entire year.
Focus on Your Loyalty Efforts This Holiday and Beyond
The potential impact your loyalty program can have on consumers during the holiday season can’t be stressed enough.
You have so many opportunities to present your loyalty program in a variety of engaging ways during the holiday season to attract more members and retain your existing ones.
Make your loyalty program a beacon for your brand and its message. Focus on it to deliver better value, benefits, convenience, and surprise rewards to members – and demonstrate to non-members why they’re missing out if they don’t enroll.
Survey Methodology: Clarus Commerce surveyed 1,045 U.S. consumers 18 and older in late September 2021.