When It Comes To Holiday Shoppers, Convenience Reigns Supreme Says This CMO

According to the National Retail Federation (NRF) US holiday sales for 2019 will check in right around somewhere between $727.9 billion and $730.7 billion. eMarketer, on the other hand, predicts the number will exceed $1 trillion. There are other forecasts out there but the bottom line is, it’s a lot of moolah we’re talking about here.

Looking Back First

Every year, Cardlytics, a native ad platform used by some of the world’s biggest banks, releases its holiday retail report based on the previous year-over-year results.

Here’s the highlights from this year’s report which encompassed 2017 to 2018 holiday retail:

• Holiday spend is on the rise: Holiday spend increased 2% from 2017 to 2018. Convenient benefits, such as free shipping, seemingly infinite choices, and buy-online-pickup-in-store options resulted in a larger number of transactions and higher spend overall, but they also led to a 0.7% decrease in individual basket size.
• Omni shoppers spend more: Customers who shop with a retailer both in-store and online spend twice as much during the holidays as those who favor one channel. However, these valuable omni customers only comprise 10.3% of the current retail customer base, presenting a huge opportunity for brands to capture additional spend.
• In-store shopping still dominates but continues to lose share: From 2017 to 2018, brick-and-mortar’s (B&M’s) share of spend declined 1.6% to 78.6%. B&M’s are losing their share of spend to online-only merchants, whose share increased 1.3% to 12.9%. However, they’re making up for some of this lost spend by investing in their own online properties, which increased slightly to 8.4% in 2018 from 8.2% in 2017.
• Fewer spikes in spend: The changing retail landscape has led to a flattening and stretching of the holiday shopping season. Consumers are spending more consistently throughout the months of October through December instead of saving their shopping for the week of Thanksgiving or the week leading into Christmas.
• Loyals drive the bulk of spend: On average, repeat customers drive 70% of holiday sales and spend 43% more than new customers acquired during the holiday season.

Looking Ahead To 2019

I recently spoke with Dani Cushion, CMO of Cardlytics, to get her take on the results on last year’s holiday spending and what it means for retailers this year.

SO: What surprised you about Cardlytics’ data on holiday spend trends?

DC: Each year, it seems the holiday shopping season begins earlier and earlier. While Black Friday and Cyber Monday are still important for retailers, as we saw with this year’s record sales, spend overall is continuing to spread more evenly throughout the season versus the large spikes we’ve seen in years past.

We also found that certain types of shoppers are much more valuable for retailers than others. For instance, during the holidays, our data shows that customers who shop both online and in-store at a given retailer end up spending about twice as much with that retailer.

However, only about 10% of retailers have customers exhibiting this behavior, so there’s a huge opportunity for them to combine strong in-store and online offerings in order to bolster their bottom line. Similarly, we found that about 70% of holiday sales come from repeat customers and that those shoppers spend a whopping 43% more, on average.

SO: What do the results mean for retailers in 2019?

DC: Convenience reigns supreme. How people are shopping is just as important as when, so retailers must understand how their customers want to shop and know that their online and brick-and-mortar properties aren’t competing — they’re additive. For instance, you’re a lot less likely to get frustrated if you don’t see your size in-store when you know you can just buy it online and get it delivered the next day.

We also found that last year brick-and-mortar still made up the lion’s share of holiday sales (78%), emphasizing how important it is for retailers to have both a physical and digital presence. Brick-and-mortar stores are losing share of spend overall though, down 1.5% between 2017 and 2018. Smart brands are offering more online alternatives to supplement their physical storefronts and are empowering customers to shop in the environment that’s most convenient for them.

In order to maximize their share of wallet, retailers across channels and industries must also start marketing initiatives early. For example, we found that customers acquired in the fall for the first time end up spending 20% more during the holiday period than those acquired during the holidays. Developing long-term marketing initiatives that drive sales over time, not just within the season at hand, are imperative to driving growth in the competitive retail market.

With December already upon us, retailers can capture more during the final weeks of the holiday shopping season by offering convenient in-store offers (like two-for-one deals, buy online pick up in-store, and free gift wrapping) for those who don’t want to gamble on shipping delivery dates.

“The retailers who’ve invested in convenience and are focused on driving the next sale will do well this holiday season — both in capturing the early-bird shoppers and the last minute procrastinators.”