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Back-to-School continues to be one of the largest shopping events of the year, and once again, Cardlytics is here to inform on the latest consumer trends. Our analysis of over $122B in BTS spend over the last 3 years sheds light on YoY trends, category-level insights, and more. Now more than ever, brands should leverage these insights to create informed, strategic marketing plans and drive long-term customer loyalty.

Back to Basics

While spend is up 3.8% YoY, it is growing at a slower pace than previously observed. Not exactly a surprise given the COVID lockdown, but it seems that the spend bounce back we saw last year has slowed, especially considering the current economic pressures.
The same slow in overall spend can be observed across purchase volume as well, indicating consumers may be consolidating their Back-to-School errands with other shopping trips (e.g. grocery, home, etc.)

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Brick and Mortar Shoppers Played Hooky This Season

Online spending is up for both B&M.coms and online only brands, indicating that the shift initially brought on by COVID is likely permanent. Brands should consider an omni-channel approach in order to engage the customer where they are spending.

Mass Merchandisers Pass with Flying Colors

Mass Merch continues to dominate as inflation drives customers to keep price top of mind. While all other subcategory spend is down in 2022, Mass Merchandisers are up 9.2% vs. 2021. In fact, Mass Merch is the only category to have YoY growth across all metrics – spend, trips, and customers – in the last 2 years. Branded retailers should ramp up engagement with existing customers to prevent churn. Get the data.

Cardlytics Helps You Make the Grade

As consumer spend begins to slow, and pressure mounts from competition, it’s never been more important to create value for the consumer, and drive brand loyalty. CDLX’ whole-wallet-view of customer spend can help identify your most relevant target audiences and unlock incremental sales – and we can prove it.

Request the data: 2023 Back to School Infographic

Small Bytes: Your serving of bite-sized analytics for your business

With inflation at an all-time high, have consumers shifted their dining behaviors? Cardlytics has the purchase data to uncover the most relevant insights within the Restaurant category and beyond.

Does Third Party Delivery’s continued growth indicate a more permanent post-pandemic prioritization of ease & convenience?

• Fast Casual category has been declining since their pandemic peak
• Upscale Dining is experiencing minimal decline vs. pre-pandemic
• 3rd Party Delivery is the only category with growth

Casual Dining bucks category trend when it comes to in-restaurant dining.

• While in-restaurant Casual Dining hasn't returned to pre-pandemic levels, it is the only category growing YoY (up 2.25 pts since 2021).
• Fast Casual in-person dining continues to fall; 2022 was down 3.4 pts from 2019.
• Online trip share has been growing across categories YoY – but at Fast Casual (+1.76 pts) and, interestingly, Upscale Dining (+1.29 pts) in particular.

Consumer shopping behavior is more unpredictable than ever, but restaurant brands can rely on performance marketing to help drive direct sales both online and in-restaurant. No matter where your customers are eating, Cardlytics can convert sales on behalf of your brand – and we can prove it.

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COVID’s long-term impact on consumer spending

As the world recovers from the COVID-19 pandemic, some pandemic lifestyle changes like mask-wearing in the U.S. remain common. America’s spending habits, however, are starting to return to pre-pandemic trends. 

After two years of disruption, we took a look back at COVID’s long-term impact and made it the focus of our quarterly State of Spend report. We were curious: Which industries have returned to normal and continue to grow, and which still suffer? Which became disruptors? And is inflation affecting buying patterns?

Cardlytics powers digital advertising for banks and financial partners, and has insight into one of every two credit card swipes in the U.S. We share this Purchase Intelligence of where, when and how consumers are shopping to help marketers identify opportunities to reach people with relevant ads. Here are some of the most compelling findings from consumer spending from 2019 through 2022.

Inflation persists

When looking at overall spending and transactions last year, a 5% year-over-year (YoY) increase in total spending occurred from 2021 to 2022 but there was only a 1% increase in the number of transactions, a key indicator of inflation. What’s more, when comparing 2022 to before the pandemic in 2019, we saw a 24% increase in household spending but only a 4% increase in transactions. Consumers are making relatively fewer, more expensive purchases. Despite inflation, and in part fueled by inflation, consumer spending in the United States continues to rise. So, how are people using their discretionary funds? 

Office Supplies sales thrive with work-from-home policies

A deeper look shows how COVID has affected consumer spending specific categories — for better or worse. Office Supplies, for example, had steady growth throughout 2020 as people scrambled to equip home offices and stay productive during lockdowns. Then as 2021 set in with Delta and other COVID variants, sales of office essentials continued to grow strong. 

In 2022, as COVID subsided, and return-to-office policies were implemented — or people had their home offices fully set up — Office Supply sales dropped 32% versus 2021. Spend and transaction volumes of Office Supplies show that people are making more frequent, lower-dollar purchases, with transaction volumes up 15% versus 2019, but sales up only 2%.

Restaurant Delivery is no longer just pizza delivery

One standout category skyrocketed and was transformed by COVID: Restaurant Delivery. The category saw unprecedented growth and arguably a decade worth of technological innovation in a matter of months. 

Restaurant Delivery purchases jumped 97% YoY from 2019-2020, with an overall 184% growth in 2022 versus 2019. Although the category began to plateau in 2022 as restaurants reopened, deliveries didn’t decrease. With similar increases in both spend and transaction volume, both purchase amounts and frequency of Restaurant Delivery continue to grow.  

Travel dips but recovers; Entertainment stays steady

Several categories that have been faltering are showing strong signs of recovery. To no one’s surprise, the onset of COVID hammered Travel spending most of all. Yet in 2022, Travel and Entertainment enjoyed a recovery, with spending up 27% from the previous year. Airlines have nearly recovered to the state they were in 2019. Spending is up 4% from 2019 to 2022; however, transaction volume is down 10%. There is lower occupancy, but everything is costing more. 

Categories like Concerts, Theater, Sporting Events, and Tickets are holding relatively steady on pricing, as both the number of transactions and dollars spent show that this industry is beginning to thrive again. Entertainment spending also continues to rise quarter by quarter, as do offer activation rates and ad campaign spends. 

Canine company, DIY food, and outdoor adventure

Our pandemic purchases reflected our adoption of millions of dogs and other pets, with a 51% increase in Pet spending from 2019 to 2022. Also, as lockdowns went into effect in the spring of 2020 to slow the spread of the coronavirus and reduce stress, reports emerged of a global gardening boom, with plants, flowers, vegetables and herbs sprouting in backyards and on balconies. Our data backs up the narrative: there was a 34% increase in Home and Garden spending from 2019 to 2022. We also ventured outdoors for safe recreation and fresh air, with a 33% increase in spending on Sporting & Outdoor Goods during the same period. 

How do we know all this?

We have a “whole wallet” view into consumer purchase behavior, with insights into one out of every two credit card swipes in the U.S. Cardlytics offers a brand-safe, fraud-free advertising platform inside our financial institution partners’ digital channels. That means we can predict future shopping preferences using past purchase behavior. Our insights help brands reach people and positively influence their purchase decisions with relevant ads that reward them with cash back, frictionlessly.

Taking a look at 2022 consumer spend patterns

With inflation at an all-time high, have consumers shifted their food shopping behaviors? At CDLX, we have the purchase data to uncover the most relevant insights within grocery and beyond.

Traditional grocers are losing share of stomach in multiple directions (-3pts vs. 2019) – act fast to retain customers.

• Restaurant captured 42% of total ‘share of stomach’ in 2022, up 1.6% from 2019
• Warehouse retailers also ended the year on a good note. Their share of stomach increased from 12.5% in 2019 to 14.5% in ’22
• Interestingly, share of trips is flat for Big Box retailers, but they have lost ground in terms of total share of stomach
• With the exception of Warehouse, which has benefited most from the inflation surge, traditional grocery appears best positioned to recapture share of stomach

Shopping channel preference varies by subcategory, so an omni-channel strategy is imperative.

Online shopping at Big Box retailers is up: 6.5% of total share of stomach in 2022, up from 2.9% in 2019 with the addition of Walmart+ and Shipt to the category.

Conversely, in-store shopping is up within Warehouse, Traditional, and Discount grocery, with increases in both trip and wallet share YoY.

Consumer shopping behavior is more unpredictable than ever, but brands can rely on performance marketing to help drive sales.

Opportunity to reclaim share exists across all grocery categories. Cardlytics can help identify and convert those audiences on behalf of your brand – and we can prove it.

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The ongoing rise in the cost of living has altered the way Brits approached spending in the last 12 months – with the Christmas period providing a clear indicator of today’s state of play. Spending year-on-year flatlined with the average transaction value sitting at around £33 for Christmas 2022 and the previous year.

Retail spending increased by less than 0.5% year-on-year in the last 11 days of 2022 –reaching nearly £442m, up £2m on 2021.

With Christmas being such a critical moment for retailers this flatline comes as a disappointment as the sector continues to shoulder the impacts of higher inflation and declining discretionary spend amongst shoppers.

That said, the Boxing Day sales provided a much-needed boost for retailers following adulled ‘Golden Quarter’. The average amount spent daily by consumers rose 18% betweenChristmas Day and New Year’s Eve last year, compared to immediate build-up to Christmas(21st -24th December 2022), with shoppers taking advantage of discounts as the cost of living continues to squeeze households.

Electricals, online fast fashion and marketplaces sales fall

Consumer spend on electricals saw a second-year of decline, as consumers reigned in their spending on big ticket items like devices, televisions and games consoles. UK electricals purchases have dropped by 20% over the last two years.

Online fast fashion retailers also experienced a slump in sales, with spend falling 42% from 2020 levels as consumers return to the high street for their wardrobe updates.

Digital marketplaces saw a 9% decline in spend year-on-year, following a period of growth between 2020 to 2021. And despite inflation hiking prices, buyers also appear to be turning away from previously loved furniture and other second-hand goods.

High street fashion, sports apparel and home improvements see gains

Despite an overall plateau in spend across the retail sector, spend in high street fashion stores, like Zara, H&M and Next, has risen 29% over the last two years – with consumers hitting the high streets to cash in on Christmas and Boxing Day deals.

Sporting goods brands - such as GymShark, Sports Direct, JD Sports - saw a 17% uptick in spend in the same two-year time period, with fitness-based new year’s resolutions fuelling prolonged sales growth.

Buyers have been turning to sales as a chance to invest in value homeware, with brands like IKEA, Dunelm and B&M recording a 12% increase on 2020 levels of spend.

While this is undoubtedly a difficult time for households - and bigger ticket purchases appear to have been put on the back-burner - consumers still want to cash in on potential deals, find ways to update their homes and wardrobes, whilst also doubling-down on their fitness goals in the new year.

As we go deeper into 2023, this is an opportunity for retailers to invest in building long-term customer engagement and loyalty. Through schemes such as rewards, discount ranges and personalised marketing, brands can deliver tailored savings and money back to their customer-base, at a time when it’s most valued. Unfortunately, the cost-of-living crisis isn’t going away anytime soon, so as belts continue to tighten, delivering savings through tailored rewards could be the difference that keeps customers engaged and onboard.

Sitting at the halfway point of the Golden Quarter, Black Friday is a crucial bellwether on consumer spending, indicating how retailers are performing and what they can expect over the critical festive period. This year saw Brits spend nearly £10 million less than in 2021 as rising inflation and the cost-of-living crisis tightened consumers’ belts.

A recent survey by Cardlytics found that over half of consumers (53%) plan to put fewer presents under the Christmas tree this year. At the same time, a similar number (46%) have said they have started shopping for presents earlier in order to spread the cost.

So, what effect did this have on Black Friday sales this year and what insight can this give us into the outlook for retailers this Golden Quarter?

Tighter budgets impact traditional Black Friday winners

Cardlytics spend data across 24 million UK bank accounts shows that total spend across key retail verticals this Black Friday weekend was £220 million – a reduction of 9% year on year. Black Friday itself saw a 6% dip in the number of transactions when compared with 2021.

Strikingly, the categories that took the biggest hit were those most often associated with Black Friday. Fashion and clothing saw some of the largest declines, with spend at fast fashion brands decreasing 30% year on year and the number of transactions declining by 31%.

It was a similar story for luxury brands which saw spend down 23% year on year and transactions dip by 17%.

Make-up and electrical goods, two sectors traditionally targeted in the sales, also saw weaker activity across Black Friday with spend falling 18% and 19% respectively.

Sales of less traditional Black Friday categories have fared somewhat better. Sporting goods were the standout stars this year seeing spend increasing by 2% compared to 2021 and transactions declining by 1%.

Learnings for Christmas

With people planning to spend less on festivities this year, and a weaker Black Friday than previous years, the Golden Quarter is likely to lose some of its shine for retailers. Consumer prices are continuing to increase and discretionary spend is on the decline, resulting in increased levels of caution around spending. Spend is shifting away from ‘aspirational’ items and gifting for Christmas to more practical, everyday purchases such as sporting goods.

We also know that consumers are looking for value from their shopping with nearly three in five (57%) planning to spend more time searching for deals for gifts. Retailers can tap into this by focusing on core product ranges that give customers value for money and by offering tailored discounts on the products they need the most – be it for gifts or when thinking about the January sales.

Are sales enough?

As Black Friday has shown, blanket discounts aren’t enough to get consumers through the door anymore. News stories have pointed to Black Friday discounts being less significant than they appear, resulting in a seemingly increased level of scepticism around such sales.  

As retailers look to Christmas and the frenzy of Boxing Day sales, this is an opportunity to take a more personalised approach to consumers – offering them tailored discounts on the brands and items that mean the most to them based on their shopping habits.

In times of financial challenge, helping people feel they have got a genuine deal on items that are worth buying has become more critical than ever and will help to build loyalty for brands in the long run.

Retailers have long been aware of the requirement for personalisation to drive sales and customer loyalty. As the cost of living crisis deepens, the need for this personal touch will only intensify – and those that can deliver on this, learning from Black Friday, will be the ones that build brand loyalty for the long-term, driving clear outcomes for the top and bottom lines.

ATLANTA, GA – January 23, 2023 - Cardlytics (NASDAQ: CDLX), an advertising platform in banks’ digital channels, today announced that Cardlytics’ Board of Directors granted 350,000 restricted stock units of Cardlytics to Amit Gupta, Cardlytics’ newly hired Chief Operating Officer. The foregoing restricted stock units were granted as a material inducement to employment with Cardlytics in accordance with Nasdaq Listing Rule 5635(c)(4) and were granted under the Cardlytics 2022 Inducement Plan (the “2022 Inducement Plan”). 50% of the restricted stock units shall vest on the first anniversary of the grant date and the remaining 50% of the restricted stock units shall vest quarterly over the following year, subject to Gupta’s continuous service with Cardlytics as of each respective vesting date. The restricted stock units are subject to the terms and conditions of the 2022 Inducement Plan.

About Cardlytics

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in Palo Alto, Los Angeles, New York, and London. Learn more at www.cardlytics.com.

Contacts:

Public Relations:

Robert Robinson

pr@cardlytics.com

Investor Relations:

Robert Robinson

ir@cardlytics.com

Headlines professing the challenging impact of the cost of living crisis on retail are everywhere at the moment. From sky high inflation, astronomic delivery and rent costs, to reports of dwindling consumer spending, the outlook is tough for retail.

Our new spending report found that four in five (79%) consumers are spending more on day-to-day outgoings than they did a year ago, with three quarters (72%) saying they plan to cut-back on non-essential spending this year as the cost-of-living continues to rise. 

But as consumers tighten their purse strings and re-prioritise spending, that doesn’t mean there aren’t opportunities that high street retailers can capitalise on. 

We’re already seeing spending patterns start to shift as budgets tighten, with more emphasis on more affordable little luxuries than bigger ticket items. 

But the real opportunity for high street brands is how they can capitalise on the fall in spending on luxury and designer brands. 

Spend on luxury and designer brands fell 7% in the first 6 months of 2022 compared with 2021, while the number of transactions at luxury brands dropped 10% in the same period. This proves that consumers aren’t just spending less on designer and luxury goods, but are turning away from these brands altogether.

This downward trend looks set to continue into next year, with over half (59%) of consumers planning to spend less on luxury goods this year, while a further half (48%) plan on switching to cheaper brands for clothing and homeware as the cost-of-living bites.

This is the big opportunity for the high street. When recessions hit, consumer desire to purchase and treat themselves doesn’t go away, it simply changes shape. As shoppers choose to spend less and spend better, moving away from designers, the need to replace items or buy clothing won’t dissipate. The key for high street brands will be how they can capture this spend. 

Traditional high street retailers are already benefiting from the gap that luxury leaves, with both total spend and the number of transactions at high street fashion brands up 11% in the first six months of 2022 compared with 2021 as consumers ‘trade down’ when shopping.

As the cost-of-living crisis continues to bite, high street fashion brands should position themselves as a great value alternative for quality designer goods to encourage people to make the shift away from luxury shopping. 

To do that, serving luxury and designer shoppers relevant rewards and offers on the categories they shop the most can help divert spending.

Banking channels are an effective way to target these higher spending customers – targeting specific customers in the channels they already operate in with the brands they love to encourage switching and spending. 

This doesn’t mean that retailers must engage in a race to the bottom on price, keeping price lines reassuringly expensive for this shopper set can help make the switch more appealing. 

As shoppers prioritise their spending, and move away from luxury and designer purchases, high street brands that invest in this group now will expand their market share in the long run.

Download the UK State of Spend report here.

ATLANTA, GA – January 23, 2022 – Cardlytics (NASDAQ: CDLX), an advertising platform in banks’ digital channels, today announced the appointment of Amit Gupta as its Chief Operating Officer, reporting directly to Karim Temsamani, Chief Executive Officer.

Effective today, Gupta will lead Cardlytics’ overall operations, strategy, and business analytics, where he will closely align with sales, product, and engineering leadership to deliver an optimized platform that exceeds both advertiser and partner expectations. In addition, Gupta will serve as the general manager of Bridg, where Cardlytics can leverage his experience running and scaling businesses. Amit Jain, current CEO of Bridg, will work closely with Gupta as he transitions out of the business over the next several months.

“Cardlytics is delighted to have attracted such a thoughtful, experienced and operationally strong executive,” said Temsamani. “Amit and I worked together for several years at Stripe, where he always impressed me with his strategic and technical abilities. I look forward to resuming our partnership as we optimize and grow the potential of the Cardlytics business."

Gupta joins Cardlytics from Stripe where he was Head of Strategy and Operations for Global Partnerships, responsible for work with banks, networks, and payment methods. Before Stripe, Gupta was Director of Strategy, New Products, and Operations for Google’s Geo division, leading product and engineering execution and strategy for popular consumer and business products like Google Maps, Local Search, Food, Maps Enterprise Platform, and SMBs. Prior, Gupta founded and was the CEO of a series of startups. He started his career at Booz Allen Hamilton, where he was promoted to Partner in the Technology practice working with clients across media, financial services, and consumer products.

“I am extremely excited to join the Cardlytics team. My background in both advertising and financial technology gives me a unique perspective on Cardlytics’ current capabilities and future product offerings. The product roadmap ahead makes now the perfect time to focus on operational excellence by optimizing the efficiency of the core platform and unlocking the potential of the promising Bridg business. I’m looking forward to helping the team execute on our goals and harness the full power of the platform in such a pivotal moment,” said Gupta.

Gupta holds a Bachelor of Science, Electrical Engineering from The Ohio State University and a Master of Business Administration from the NYU Stern School of Business. He will be based in Cardlytics’ Palo Alto office.

About Cardlytics

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in Palo Alto, New York, Los Angeles, and London. Learn more at www.cardlytics.com.

Cautionary Language Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to future growth and delivery of an optimized platform. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," or variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control.

Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to the risks detailed in the “Risk Factors” section of our Form 10-Q filed with the Securities and Exchange Commission on November 1, 2022 and in subsequent periodic reports that we file with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Contacts:

Public Relations:

Robert Robinson

pr@cardlytics.com

Investor Relations:

Robert Robinson

ir@cardlytics.com