There were some big retail happenings in Q3 2018.
We saw Prime Day become Amazon’s biggest shopping event ever in terms of sales and for signing up new Prime members.
What’s more, we saw an iconic 181-year-old brand Tiffany’s show that it’s never too late to change your image to appeal to a younger demographic and spark increased customer loyalty.
Meanwhile, in the world of professional sports, the Oakland A’s launched an unprecedented new membership program called A’s Access that replaced its traditional season ticket program.
After its acquisition of Whole Foods in 2017, Amazon is targeting the movie industry. Published reports say Amazon is in the running to acquire Landmark Theatres, which operates 53 theaters in 27 cities.
In keeping with the movie theme, we gave two enthusiastic thumbs up to AMC Theatres and the recent unveiling of its VIP tier called AMC Stubs A-List.
Here’s what we learned from the third quarter:
What the Biggest Prime Day Ever Means for Other Retailers
Amazon’s fourth annual Prime Day set new records for the Seattle-based online behemoth.
Based on the results, sales surpassed those on Cyber Monday, Black Friday, and the previous Prime Day, making this year’s Prime Day the biggest shopping event in Amazon history.
The sale also lured new Prime members in search of deals, a move that helped the company exceed its current count of 100 million members. While Amazon did not provide hard numbers, the online retailer reported that more new members signed up on July 16 than any single day in Amazon history.
Despite Amazon’s preparations, the shopping marathon got off to a rocky start. Just as the sale was about to kick off on July 16, at 3 p.m. EST, Amazon’s website and mobile app both sustained an outage, causing digital deal seekers to receive a variety of error messages that featured the “dogs of Amazon.” Some users were initially unable to enter the site, while others were caught in a loop of pages urging them to “Shop all deals.”
During the time of this outage, Amazon could have lost $1.2 million per minute.
Technical difficulties notwithstanding, Amazon built momentum during its record-setting Prime Day.
Our CEO, Tom Caporaso, talked about Prime Day’s impact on other retailers in this article he wrote for PaymentsSource.
“Target showed that any retailer can take full advantage of the halo effect created by Prime Day,” Tom explains. “It takes a certain amount of preparation and strategy, but retailers can make Prime Day a ‘prime day’ for themselves.”
Tom adds: “The volume of online shoppers that Prime Day attracts is enough reason for any retailer to create one of these single-day shopping festivals for themselves. If retailers want to engage their customers during Prime Day and tap into that Halo Effect, they should think strategically.”
How an Iconic Brand Like Tiffany’s can Shows Its Younger Side
It doesn’t matter that the venerable brand, Tiffany’s, has been around for 181 years. Officials at Tiffany’s have shown that it’s never too late to alter your image to appeal to a younger group of potential customers.
To restore some of its lost radiance, Tiffany’s is targeting millennials by using a heavy dose of social media and digital marketing, Tiffany’s has found new life that has fueled significant company momentum, both organically and fiscally.
Tom talks about Tiffany’s image relaunch in an article he wrote for Total Retail.
“A fresh new image, appealing to millennials in particular, is a focal point to drive customer loyalty for Tiffany’s,” Tom wrote. “Tiffany’s made a splash at Super Bowl LI, formally announcing Lady Gaga as one of the new faces of the brand. The Super Bowl commercial also marked Tiffany’s first TV ad in 20 years. Focusing on milestone events (e.g., weddings, birthdays, anniversaries) makes the millennial demographic more important to Tiffany’s in the long run.”
Tiffany’s “Believe in Dreams” campaign targets a younger demographic and features celebrities such as Elle Fanning, Maddie Ziegler, and A$AP Ferg.
What’s more, Tiffany’s launched its “Believe in Love” campaign, which spotlights the jewelry brand’s engagement and wedding rings.
Tiffany’s knows and understands its customers well. It refreshed the brand image and introduced new messaging without losing its loyal base of older, wealthy customers.
“Customer-centricity has helped Tiffany’s regain some of its lost luster,” Tom says. “All these elements are critical to establishing long-term customer loyalty.”
How a Major League Baseball Team can Knock it Out of the Park with a Subscription Model
For Chris Giles, Chief Operating Officer of the Oakland A’s, the traditional season-ticket model was working for some folks, but many others desire something with more flexibility.
“We’re seeing baseball at a bit of a crossroads as far as what fans are looking for in their experience,” Giles told Clarus Commerce. “Traditional fans look for consistency and ownership and the neighborhood of people that sits around them for the same games as close to home plate as possible. We’re now seeing a rapidly growing group of fans that wants something completely different. Selling them an old package is unappealing. They want something more flexible and something more social. They liken it to a food tour or bar hopping.”
In late July, the A’s announced they will no longer offer traditional season tickets for 2019. The program will be replaced by a new membership program called A’s Access.
Season tickets are feasible in the NFL, but there isn’t a large group of consumers that can attend 81 baseball games a year. Giles talked about A’s Access very much like a sophisticated retail premium loyalty program.
“As an industry, we need to do a much better job of providing exclusive member benefits,” Giles explained. “We’ve created some things that are proxies for member benefits, such as half off concessions and 25 percent off merchandise. At a very high level, this is an initial pilot to a program we will build out over time.”
Why Taking to the Big Screen Could Make Sense for Amazon
Just as Amazon boldly entered the grocery industry in 2017 after it acquired Whole Foods for $13.7 billion, it appears that the online giant might venture into the movie industry.
Amazon is reportedly in the running to acquire Landmark Theatres. Amazon certainly has an efficient means to distribute its films. Given the recent problems connected to MoviePass, it could also be a good time for Amazon to consider launching a similar subscription movie service.
“Amazon is trying to dive deeper into original content to compete with Netflix,” Tom says. “Owning a theater chain could augment that effort. Maybe Amazon would add movie perks for Prime members like heavily discounted tickets and concessions.”
Amazon has always known how to identify customer pain points and address them in a mutually beneficial way.
“If Amazon buys Landmark Theatres, and leverages its Prime program moving forward, this could present a major disruption to the movie industry,” Tom adds.
How AMC Theatres Upped the Ante on Premium Loyalty
AMC Theatres added a new VIP tier called AMC Stubs A-List.
Through A-List, which launched in late June, members pay $19.95 per month and can enjoy up to three movies per week at every available showtime, at every AMC location, in every format including IMAX at AMC, Dolby Cinema at AMC, RealD 3D, Prime at AMC, and BigD.
AMC Stubs A-List members also enjoy all the benefits of AMC Stubs Premiere.
Similar to Amazon’s staggeringly popular Prime program, officials at AMC Theatres continue to target their best and most loyal customer by adding the benefits they desire.
Targeting your best customers lies at the heart of a paid loyalty program.
AMC Theatres has done this quite well since it launched AMC Stubs in 2011 and added a free tier (AMC Stubs Insider) in 2016.
AMC Theatres announced that the new AMC Stubs A-List program enrolled more than 380,000 fully paid members in its first three months. The A-List program has pushed the current membership of the entire AMC Stubs program to more than 15.8 million U.S. households.
Officials at AMC Theatres seek to manage the program in such a way that it remains fresh and value-driven.
Takeaways from Q3 2018
We saw many interesting things related to customer loyalty occur in the third quarter and it seems like they all circle back to one overarching theme: Treat your best customers the best, and make sure you offer value to all.
Loyalty programs are successful when brands truly listen to their customers, identify their pain points, and implement favorable changes based on those findings.
This isn’t only true of retail. It applies to all industries that serve customers, and even professional sports teams that want to build deeper relationships with their fans.
It’s about transitioning from listening to your customers, to hearing your customers, and then taking relevant action on behalf of your customers.