White papers in a blink
Our accelerated shift to Digital and the long term ramifications of Covid-19
Description: The Covid-19 outbreak has accelerated the digitisation of how we work, live and shop. But how will today’s habits shape how people exist in a post COVID-19 world?
White Paper Source: “The Shift to Digital – Mastercard Recovery Insights” Spending Pulse
Since the outbreak of Covid-19 we have seen work, school, exercise, doctors, entertainment, legal services and retail shift from physical to online Consumers have quickly developed a baseline expectation for an omni-channel shopping experience and for those that haven’t been able to adapt rapidly, and didn’t have good capability prior to the crisis, it’s been hard to catch up.
In the full month of May 2020, US e-commerce spending grew by 93% year on year and during the same month e-commerce as a share of total retail sales reached 33% in the United Kingdom - an unprecedented high.
U.S E-Commerce Sales Growth in May 2020 compared to the prior 12 month average saw particular growth in footwear, apparel, electronics, sporting goods, toys, hardware and auto parts.
Groceries has seen the biggest surge, but spending on interior furnishings and home improvements has seen the most profound shift to digital with roughly $9 billion spent in the US in May. This spending growth was bolstered in large part after stimulus funds were dispersed (89.5 million Americans received a stimulus cheque during first 3 weeks of program) and after unemployment insurance kicked in around the end of March.
Consumers were predominantly focussed during this period on more on staples versus spending on luxury. In May e-commerce luxury decreased by14% year on year showing that the digital shift has not been seen in all sectors; among these, furniture, department store sales and jewellery have been significantly negatively impacted.
But what trends are likely to continue post Covid-19? Activities consumers miss the most are ones that experts predict they will likely want to return to first, however the safety of these activities will be a primary consideration.
28% of consumers most missed eating out, 19% missed travelling and 19% missed out of home leisure activities.
Consumers expect long term changes to their lives including 69% think we will be using more contactless payments, 60% think that the shift to working from home will persist, 47% think that consumers will shop less in store and 50% think that we will go to fewer movies, concerts, museums and sporting events.
Some profound changes can be seen in the changes to Retail radius, In the past it was defined by distance from other retail stores. Favourite coffee shops, shopping malls, and barbers centred on the shoppers’ home and span out from there as personal movement and comfort levels pick up. With a focus on neighbourhood shopping.
Companies in the past focused on fewer, larger stores but data-driven insights from HEMA, which operates more than 750 variety stores in three continents is showing that smaller stores, were doing better than larger ones. Sales are shifting to these smaller stores, located in more residential areas, as people choose to stay home and shop more locally. This shift inward has also led to an opportunity. While small businesses traditionally lagged behind larger ones in omni-channel presence, the trends of both shopping local and shopping from home converted to ignite a need for them to go online.
Customer loyalty has also changed dramatically as traditionally brands spent more time, love and attention as well as lavished more ’touch’ on their high-priority customers. This used to mean a higher quality experience – and equalled higher loyalty. Enter Covid-19, and the model has been turned on its head. Now fewer attendants, less interaction and NO touch wherever possible signifies quality. For brands loyalty programs, that also means a shift to digital engagement and carving our unique niches that help them stand out,
It is interesting to see that as countries open up we are seeing corresponding week-over-week deceleration in e-commerce growth and spending in restaurants and bars increasing, but will the ratio ever go back to the way it was pre Covid-19? Only time will tell.
The Essential Guide to Modern Loyalty Programs - Everything you need to succeed in the modern loyalty landscape
Description: A shift in data types, a shift from transactional to emotional programs, a shift to new types of currencies, and a shift to doing something daring.
White Paper Source: “The Essential Guide to Modern Loyalty Programs - Everything you need to succeed in the modern loyalty landscape” by Cheetah Digital
What are the key tenets of a modern loyalty program? It’s a constantly shifting definition, but the best programs share many core elements. The masterminds of modern loyalty programs are constantly on the lookout for the next big thing. When convenience, price, and quality are not enough of a differentiator, what else can be? There are several significant shifts in the loyalty landscape happening right now that brands looking to evolve their loyalty programs should be on top of.
Firstly a shift in data types to zero-party data use only and an increase in respectfully and conscientiously gathering customer data; Secondly a shift from transactional only programs to those that encourage emotional connections as well. Consumers have, literally, a world of purchasing opportunity open to them and organisations cannot rely solely on transactions. Develop true affinity by looking at what your brand does best, what aligns with your brand values, to come up with creative ways to reward members beyond just dollars spent. A shift to new and multiple types of currencies. <Fleet Feet> in the US for example, who sell running shoes, use their loyalty app to reward runners for miles run, for clinics and classes members attend in stores, for checking in at events, for taking quizzes, and for documenting their health indicators. Lastly, a shift to doing something daring helps your program to stand out to the consumer, and connects with them in a way others can’t. <Old Chicago> recognises its most loyal customers through their <World Beer Tours>, offering guests the ultimate challenge of drinking 110 varieties of beer to earn a spot in the program’s Hall of Foam. Rewards for this are highly prized, such as your own glass kept behind the bar.
Top Loyalty Tactics:
Retail
Speed is everything; customers want options when it comes to delivery, often desiring faster or cheaper delivery options.
Messaging is consistent across all channels. In store staff should have the same relevant information about a customer available to them, so they can use that information to deepen the relationship.
Enable your client-facing employees. Their interactions matter when speaking to members; advise them to acknowledge members by using first names and thank them for their loyalty. If they aren’t a member, they should ask and confidently explain the benefits.
Returns and exchanges are a hassle, but if they’re flexible and fast, customers won’t feel so intimidated by the process.
Sending follow-up communication can encourage post-purchase behaviour. Customers that experience true personalisation in communications are 44% more likely to become repeat buyers, 39% more likely to tell friends and family about it; and 32% more likely to leave a positive review*.
Experiential rewards are just as popular as monetary rewards. Whether it’s early access to a sale or a birthday surprise, it makes customers more loyal to your brand.
Travel
Increase flexibility. The hallmark of travel loyalty programs in the past was rigidity. Removing a few restrictions can make your loyalty program more appealing to a wider audience. United Airlines, and Delta before them, dared to offer something other airlines didn’t: points that didn’t expire. When points are as good as cash, as they are to frequent flyers, customers appreciate airlines keeping that liability on the books.
Loop your customers in. Let them know about updates to their travel plans or anything that can make their experience more convenient. A simple text message from the airline letting you know where your connecting gate is for your next flight, and how long it will take you to get there, will make a usually very stressful connection, easy and seamless.
Embrace clarity. Do your customers find your points system confusing? Complexity only adds confusion and members that feel like you are tricking them won’t engage.
Keep the channels open. Whether it’s email, social media, or over the phone, your most loyal customers have the expectation of being able to communicate with you when they need help.
Financial Services
Embrace experiential marketing. One of the areas that financial services brands can provide experiences is to find ways to help customers improve their financial health.
Surprise and delight. No one really expects to be surprised and delighted by their financial institution, which is why rewarding customers with surprises like tickets to their favourite shows will make them feel valued and create a warm sentiment towards your brand.
Try out tiers. financial industries have yet to take advantage of a tier system. Customers will feel motivated to get to the next level and stay engaged once they reach higher tiers.
Make it exclusive. There are already exclusive cards, programs, and accounts that only certain members can take advantage of. Customers love to be a part of a select group.
Don’t be afraid to go outside the industry. Quizzes or polls on a variety of topics can encourage customers to engage.
Restaurants
Recognize your most loyal customers. Every visit should get points, but very frequent customers should be recognized and rewarded,
Freebies are always appreciated. <Donatos> thinks outside the (pizza) box with <Donatos Pizza Love Rewards>. with Birthday surprises, free pizzas and amazing customer service they make customers go out of their way to get the rewards only available at their restaurant.
Take advantage of referrals. Reward customers for sharing your program with their friends with 2-for-1 deals.
Convenience is key — especially in today’s climate. Make it extra convenient for customers to eat at your restaurant, whether that’s offering payment inside your loyalty app or offering easy pick-up options.