Top 5 Trends to Strengthen Loyalty Game
To balance the risk of uncertainties during inflation, consumers are saving more and waiting for the right time to make a purchase. Analysing the data points from global shoppers’ buying behaviour, the Salesforce Shopping Index predicted the top 5 trends to help retailers with their loyalty strategy.
Shoppers have been searching for savings and waiting to make big purchases. After remaining largely resilient in the last four years of economic uncertainty, consumers are finally feeling the pinch. They are spending more, buying less, and seeking value.
According to Salesforce research, 37% of global shoppers say they’re using their credit cards more than in the previous year, while 32% of them are using alternative credit services like “buy now, pay later” more frequently.
Around 43% of consumers are carrying more debt compared to 2023. And this isn’t unique to one income bracket – consumers across all levels are tapping into their credit lines more.
To balance this risk of uncertainties during sustained inflation, consumers are saving more and waiting for the right time to make a purchase—potentially the holiday season. Analysing the data points from global shoppers’ buying behaviour, the Salesforce Shopping Index predicted the top 5 trends that will help retailers strengthen their loyalty game, this holiday season.
Prediction 1: Chinese shopping apps will continue to take market share
As consumers face uncertainty around rising prices, shoppers are looking for the best deal. Chinese shopping applications will capture $160 billion in global ecommerce market share outside of China. In the last six months, two-thirds of consumers from Western markets made at least one purchase on Aliexpress, Cider, Shein, Temu, or TikTok. According to 58% of consumers, these shopping applications offer the lowest prices.
What can brands and retailers do about it?
As we approach the holiday season, brands and retailers must pay attention, as 63% of Western consumers plan to purchase from these applications during this critical period. They can use data and AI to develop an attractive promotion and discount strategy for the month of November. If special pricing doesn’t go into effect until Black Friday, they can give shoppers advance notice, especially those enrolled in loyalty programs, warning them to wait for discounts.
Prediction 2: Middle-mile shipping expenses to surge
Brands and retailers will spend an extra $197 billion in middle-mile expenses, an increase of 97% over last year. Last-mile challenges are also mounting up thanks to events like the collapse of the Francis Scott Key Bridge and rising delivery costs, stalling delivery times and adding expenses for retailers.
Action Plan for Brands and Retailers
Retailers shouldn’t push the shipping expenses back on shoppers. Free shipping offers are the top reasons why consumers choose to make a purchase from a particular brand or retailer. With shoppers focused on cost this year (rather than shipping times and return policies), discounted and free shipping are table stakes for the industry. In fact, over half of shoppers say they are more likely to purchase online than in-store if delivery is free.
They should stay prepared to make reduced or free shipping standard practice this year, further motivating shoppers to buy online and pick up in-store. Additionally, they can introduce incentives for doing returns in stores rather than mailing them back. On the flip side, retailers can charge a fee for returns through the mail, especially your most loyal shoppers.
Also Read: APAC Retailers are Monetising Returns, Here’s How
Prediction 3: Shoppers will continue to embrace AI-based gift recommendation
AI-powered product recommendations and chatbots have always made merchandise discovery and issue resolution faster for shoppers. This holiday, generative AI search is poised to significantly change consumer expectations and experiences. For example, as Google embeds Generative AI into its search product, consumers will adopt and act in more conversational ways when they search online.
In fact, 53% of shoppers surveyed said they are interested in using generative AI to inspire the perfect present.
What can retailers and marketers do?
They can continue to embed AI into search experiences to potentially drive a nearly 3x better conversion rate compared to traffic not engaging with site search. For instance, Amazon debuted Rufus, an AI-powered shopping assistant for shoppers. Google also integrated genAI-backed shopping recommendation features, helping consumers overcome choice fatigue.
Prediction 4: Black Friday and Cyber Week to be the biggest deal
As online shopping grew in popularity and consumers could shop from anywhere, Black Friday gained back 4% of online holiday sales last year. Similar results are expected in the upcoming holiday shopping season. In fact, more than 66% of shoppers say they’re holding out on making big purchases until Cyber Week, anticipating better deals. Meanwhile, 65% of shoppers say Black Friday has the best discounts of the year.
Salesforce research shows that consumers will continue to prefer the convenience of online shopping on this busy day. Potentially, online sales are expected to take 7% off in-store sales on Black Friday.
Suggestions for online retailers
Focus your Cyber Week efforts on prepping their website and social channels for a Black Friday blitz. Use customer data and deploy AI to offer seamless, connected, personalised ecommerce experiences that reward loyal shoppers and convert holiday browsers.
Prediction 5: Retailers will continue to tap loyal shoppers
Shoppers are prioritising brands and retailers that offer loyalty programs. According to the Salesforce Shopping Index, the rate of repeat buyers in the first quarter increased by 8% over the last two years. The research further revealed that 46% of shoppers say earning and redeeming loyalty points is the second highest factor, behind price, influencing where they buy.
What steps can marketers take to create effective loyalty programs?
Loyalty programs add even more value for shoppers who are already seeking out low prices. In fact, 63% of shoppers are making more purchases from stores where they can earn and redeem loyalty points.
Even though shoppers are doubling down on loyalty, Customer acquisition continues to be costly for retailers. Brands and retailers have to better engage their existing customer base amid this tug-of-war over digital advertising space. They can use their loyalty data, including shopper profiles, preferences, and purchase history, and make it all accessible to store associates, call centre agents, and the consumers themselves. Based on the gathered insights, retailers can incentivise loyalty members by offering exclusive perks like free expedited shipping, free gift wrapping, early access to sales, and exclusive merchandise.
The holiday shopping season is retailers’ time to shine. Black Friday and Cyber Week are back to being bright spots for their bottom line. This season will be competitive, intense, and undoubtedly about pricing and discounting strategies. It’s never been more important to rely on your customer data for guidance and insight into marketing campaigns, especially the holiday promotional calendar that retains loyal customers.
