Looking Back to Plan Ahead: Retail Holiday Hindsight

With less time between Thanksgiving and Christmas, and growing consumer expectations, the busiest season for retailers and shoppers continued to evolve in 2019 as the battle for consumers’ attention and dollars was as competitive as ever. Alliance Data’s Holiday Hindsight research and holiday retail data showed the importance of customer connections, convenience and channels, promotions, and loyalty.

Retailers can take the time now to look back on the triumphs and challenges from the previous holiday season. Doing this will equip retailers with lessons learned and future opportunities to differentiate themselves when it comes time to plan for holiday 2020.

Continue Focusing on Long-Term Customer Connections

Consumers were bombarded with special promotions and offerings during the holiday season, forcing retailers to find new ways to cut through the clutter to successfully reach customers. Pop-up shops, events, contests and social activations enabled brands to deepen relationships with their consumers this past holiday season.

While promotions can drive short-term behaviors, brands are better served by strategies that create loyal customer relationships over the long term. Six in 10 customers expect brands to show loyalty to them in return for their business. These customers are looking for deep connections that extend beyond the product and price; they're looking for an easy, convenient experience along with knowledgeable and accessible customer service.

Shoppers Have Permanently Shifted to Channel-Less Lifestyles

The disparities between brands offering seamless experiences and those that don’t will only become more visible to consumers, many of which have grown accustomed to the benefits of channel-less offerings.

The goal for brands just beginning the channel-less journey is to determine which aspects of the customer experience to focus on first. Convenience-based benefits, like buy online, pick up in-store, utilized by 30 percent of shoppers last year, can increase incrementality as well as engagement.

The Holiday Calendar Continues Expanding – Now Past Halloween

Retailers must view their promotional calendar as a marathon, not a sprint.

Consumers expect promotions when it comes to holiday shopping, with these discounts driving many customer purchasing decisions. Total discounts of 20 percent to 75 percent were observed throughout the holiday season, along with deep post-holiday sales. However, many brands kicked off holiday campaigns in mid-October, forcing retailers to keep up competitive promotions for an extended period of time.

As more than a quarter of consumers are holiday shopping year-round, with 26 percent shopping for the holidays during Prime Day in July, retailers are faced with an ever-lengthening promotional calendar. Brands will need to develop strategies that capture early shoppers and keep engagement up through the end of the season as the holiday season has been redefined.

Leverage Loyalty Programs to Foster Year-Round Engagement

Many brands launched or enhanced their loyalty programs in 2019, and it was well worth it. Twenty-four percent of holiday consumers shopped with specific retailers because they're members of the loyalty program.

In 2020, brands should consider opportunities to better leverage their loyalty programs, including adding or reserving unique offers and perks to make members feel special. While not new concepts, brands should be looking to add freshness to their efforts, including members-only initiatives, exclusive rewards or gifts, shop early bonus offers, charitable opportunities, and others.

Mary O’Donnell is vice president of marketing at Alliance Data Card Services, a leading global provider of data-driven marketing and loyalty solutions.