Since crossing the Atlantic a few years ago, Black Friday has quickly become the biggest day of the year for UK retailers, with flash sales and extended opening hours signalling the start of the Christmas shopping season.
However, with many brands wary of the potential for chaotic in-store scenes, and recognising consumer enthusiasm for e-commerce, this Black Friday saw a greater-than-ever focus on online sales.
The online opportunity for UK brands
Consumer appetite for online deals was stronger than ever, with overall online shopping activity up 28 per cent year on year and in-store footfall reportedly down 6.5 per cent.
Dixons Carphone, for example, reported website traffic for its Currys and PC World consumer electronics chains as high as the previous Boxing Day. AO.com saw year-on-year online sales double.
Meanwhile, Collinson Latitude’s own research into Black Friday shopping activity shows mobile to be a growing force, with more than a quarter of online purchases made on smartphones or tablets.
With these trends expected to continue next year, 2016’s Christmas holiday shopping season could once again set a record, but brands will need to ensure they are providing the right environment and experience for customers if they are to take full advantage.
And there’s another twist to the story, as the short-term revenue boost produced by the holiday shopping season masks a missed opportunity to use online loyalty reward programmes (such as earn malls) to differentiate a brand from its competitors and secure longer-term customer engagement.
As predicted, UK online consumer spending on Black Friday passed the £1 billion mark, the first time it had done so on a single day. Shoppers could have pocketed approximately three billion reward points had all £1.1 billion gone through earn malls. But why is it so important to take advantage now?
Your earn mall can earn you more
Across all sectors, from retail to banking to travel, loyalty is big business. Companies understand that acquiring new customers is up to 10 times more expensive than retaining existing ones. Existing customers also spend 67% more than first-time shoppers. The business case for running a loyalty programme is watertight.
UK travel loyalty programme members we analysed had an average basket spend of £158 when shopping through earn malls on Black Friday 2015. And, our recent study of more than 2000 online shoppers tells us that rewards points and brand loyalty play a significant role in their buying decisions.
Black Friday purchases were unsurprisingly driven by the desire to grab a great deal, but other, loyalty-led incentives weren’t far behind: ‘brand loyalty’ (58%) and ‘reward points on offer’ (39%) also scored highly.
Yet consumers told us that they planned to use just one in four of their online loyalty programmes for both Black Friday and Christmas shopping, suggesting that brands are not doing enough to convince programme members of the merits of shopping through online loyalty programmes like earn malls.
Respondents also cited the reasons they wouldn’t be using loyalty programmes for their seasonal shopping; ‘a lack of special deals’ (34%), ’I didn’t know I could use my programme’ (22%), and ‘the offers aren’t relevant to me’ (13%). It seems rewards programmes themselves are failing to communicate how and where members can earn reward points.
Bring non-core rewards to your earn mall
When asked which type of loyalty programmes they will use to earn points, the overwhelming majority of consumers (87%) chose retail programmes, with finance (47%) and travel (6%) programmes falling a long way behind. A cause for concern, but also a clear opportunity for brands in these sectors.
Airlines, for instance, have long been leaders in the development of brand loyalty programmes. More than anything else, customers shopping online with airline reward programmes are looking for earn malls stocked with diverse, but relevant, non-core inventory rewards.
Travel brands must do more to make programme members aware of the ability to buy more than their core inventory offerings such as flights and hotel stays – and to earn points by doing so. When asked ‘what aspect of your reward programme could be improved for the holiday season’ – 60% of consumers pinpointed ‘more choice of rewards and retailers’.
Our research strongly suggests that loyalty programme providers, particularly those outside the retail sector, need to be thinking beyond price in order to make their shopping environments more attractive to their members.
Rewarding behaviours
Loyalty programme managers, especially in the lucrative travel and banking sectors, must deliver the right user experience and do more to inform customers of relevant deals and incentives – such as double points, special offers, and featured retailers – that will help them earn more points from their ordinary online shopping.
Next year’s bigger and better sales events may seem a long way off. But for loyalty programme members, Black Friday is yet another opportunity to earn from ordinary online spending. For programme managers it’s a chance to increase customer engagement and maintain it – long after the day itself has passed.
Don’t let another loyalty opportunity slip away in 2016.
