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How Retailers are Re-jiggering Loyalty for the Holidays

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By: Bryan Pearson |

Posted on December 4, 2018

If retailers are especially good this year, they might be rewarded with more shoppers in 2019. Many, it appears, have decided the best way to collect is by offering extra-nice reward program options.

The hitch will be keeping those new members engaged after the tinsel is down. A number of retailers, from Sally Beauty to Starbucks, have relaunched or dressed up their loyalty initiatives in advance of the holidays, when more people are out shopping and therefore more receptive to enrolling in and using loyalty programs.

Nearly four in 10 holiday shoppers (39%) said they are much more likely to shop at stores where they are enrolled in loyalty programs, a 26% increase over 2017, according to research by Epsilon. But what about after? Engagement is a major challenge for loyalty program operators: 54% of memberships in the U.S. are inactive, according to the COLLOQUY Loyalty Census. Worse, 28% of shoppers have abandoned a program before ever redeeming so much as a point or mile.

A key reason for the breakdown is a reward program’s value proposition fails to hit the relevancy button after the signup offer is used. Either the rewards aren’t appealing, they take too long to earn or they’re just too complex.

Kohl's added sparkle to its Yes2You Rewards program by giving all shoppers $15 in Kohl’s Cash for every $50 they spent during Black Friday week and Cyber Monday. (The Yes2You program regularly gives members one point for every $1 spent and a $5 reward for every 100 points.) Additionally, elite members of the Kohl’s Rewards program, which is being tested in several U.S. markets, were given early access to Black Friday deals.

Sally Beauty relaunched its Beauty Club loyalty program as Sally Beauty Rewards just in time for the holiday season. Existing members were automatically re-enrolled and given $5 in reward points to entice spending, while new members received a $5 reward certificate for joining. The program awards 10 points for each $1 spent and a $5 reward certificate for every $50 spent. Sally also launched a dedicated “Holiday Glam” page to its website to encourage repeat visits.

Nordstrom in October introduced its new Nordy Club currency-neutral program; members can now pay for purchases however they want, meaning a Nordstrom credit card isn’t required. Members gain higher status the more they spend, and with higher status comes greater rewards, including entry to invitation-only shopping events, free alterations and access to style workshops.

Starbucks is enticing its reward program members by sending limited-time promotions directly to their apps. In November, it began using its new happy hour feature to do so, sending alerts for half-priced holiday drinks. This helps raise awareness of its seasonal lineup, while those waiting for their gingerbread lattes are free to browse its selection of holiday gifts.

Swagbucks, the digital loyalty program that rewards members for online purchases across brands, is giving extra cash back to those who shop more than 200 retailers during designated periods throughout the holiday season. Participating merchants include Macy’s, J.C. Penney, Old Navy and Best Buy.

Some merchants are using the rewards to encourage members to help others. The Texas restaurant chain JumBurrito, for example, is fighting hunger through its JumBurrito Revolutionary Rewards Card. During the “No Hunger for the Holidays” fundraiser, JumBurrito is donating 50 cents for each rewards program visit to the West Texas Food Bank. In 2017, the effort raised $11,563, enough for 46,252 meals.

Though Sears Holdings is in Chapter 11 bankruptcy reorganization, it still offered special holiday perks to members who used its Shop Your Way loyalty program over Black Friday weekend. Members received $50 cash back in points on in-store purchases of at least $50, and earned additional points by texting the words “gravy” and “turkey” to a special number.

3 Ways to Engage in 2019

These efforts may encourage new memberships and shopping in the final weeks of 2018, but whether members return to these programs in 2019, or exchange them for others, depends on how well the proposition fits the shopper. Here are three loyalty guidelines.

  1. Wrap the app into everything. New reward programs should include app features, which are more likely to keep members close to the brand. Shoppers were projected to spend more than 130 million hours in shopping apps during the weeks of Black Friday and Cyber Monday on Androids alone, according to research by global data provider App Annie. That would represent a 25% increase over 2017.
  2. Take tabs of most-used perks. The holidays present a great opportunity to gauge which features shoppers most use and which are likely to keep them coming back. Those perks should be offered year-round, and if they already are, strongly promoted and enhanced. Further, shoppers will likely feel more invested in retailers that tell them they played a role in a decision to extend a special feature (“We heard you over the holidays, so we’re offering free gift wrap all the time!”).
  3. Use the data to engage, ASAP. A merchant will gain just a limited view of its new rewards members during the holiday shopping season, so it should use that time to extend special thank-you offers for 2019. New members will likely only take advantage of these offers, however, if they are immediate and meaningful enough to leave an impression — no strings attached.

The greatest gift anyone could receive for the holidays is the knowledge that they made someone’s life better. This extends to retailers that are serious about customer loyalty. If a retail rewards program has the wherewithal to do so, then it should try.

Bryan Pearson a Featured Contributor to The Wise Marketer and is the President of LoyaltyOne, where he has been leveraging the knowledge of 120 million customer relationships over 20 years to create relevant communications and enhanced shopper experiences. 

This article originally appeared in Forbes. Be sure to follow Bryan on Facebook and Twitter for more on retail, loyalty and the customer experience.