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Make sure loyalty counts in the ecommerce space Published-Jan 11, 2016

For decades, the start of the end-of-year shopping season in the US has been marked by ‘Black Friday’ in the last week of November, with flash sales and extended store opening hours making it the biggest shopping day of the year. Since crossing the Atlantic a few years ago, Black Friday has had an incredible impact on the UK and European retail landscape.

But in the Middle East, it is ‘White Friday’ that is making waves.

Consumer appetite for online deals is stronger than ever... the recent White Friday smashed all previous records for e-commerce in the region, with Souq.com hosting more than 13 million visitors and selling more than 600,000 items, twice as many as during the 2014 promotion.

More than one in three of those items was purchased through the Souq.com mobile app, proof that brands and consumers in the Middle East are leading the way when it comes to engagement with m-commerce. Collinson Latitude’s own research into online Black Friday shopping activity in the UK found that more than a quarter of purchases were made on smartphones or tablets.

With consumer enthusiasm for online shopping showing no sign of waning and with smartphone penetration increasing, these trends are expected to continue. This year’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 White Friday masks a missed opportunity to use online loyalty reward programmes to differentiate a brand from its competitors and secure longer-term customer engagement. But why is it so important to take advantage now?

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 per cent more than first-time shoppers.

White Friday may have directed more than six times as many new shoppers to Souq.com as normal, but it terms of maintaining that engagement, the business case for running a loyalty programme is watertight. And if that wasn’t enough, Collinson Latitude’s recent study of more than 2,000 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 per cent) and ‘reward points on offer’ (39 per cent) also scored highly.

Yet consumers told us that they planned to use just one in five 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 earn malls for their seasonal shopping; ‘a lack of special deals’ (34 per cent), ’I didn’t know I could use my programme’ (22 per cent), and ‘the offers aren’t relevant to me’ (13 per cent). It seems rewards programmes themselves are failing to communicate how and where members can earn reward points.

When asked which type of loyalty programmes they will use to earn points, the overwhelming majority of consumers (87 per cent) chose retail programmes, with finance (47 per cent) and travel (6 per cent) 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 per cent 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.

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.

This year’s bigger and better sales events may seem a long way off. But for loyalty programme members, White Friday should be 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.

 

 

 

Sourced By: gulfnews.com

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