Customer Loyalty

It’s the most wonderful time… to shop. With the season of giving inspiring shoppers to buy more, retailers are seeing a high volume of web traffic, spikes in sales, and some of their largest profit margins. Last year, retailers saw unprecedented growth during the holiday season. What drove that growth and how can brands shape their holiday strategy this year to capitalize on these seasonal shopping trends? Using the purchase insights we receive from 1 in every 2 card swipes in the U.S., here’s what we know... 

Capture your customer ahead of the first chill 

Every year it seems like the holidays start earlier and earlier. That’s no different this year, especially with some consumers concerned about potential supply chain-related shipping delays. One major seasonal shopping trend that we see year over year is that advertisers benefit the most by engaging with consumers early in the season. Our insights show that customers who shop earlier in the fall are 10 times more likely to return compared to the natural holiday walk-in rate. Those who engage their customers early will be rewarded with loyalty later in the season.

One-stop shops reign supreme 

Last year, mass merchandisers saw the largest spend share increase, growing +3 points from 2019, suggesting shoppers consolidated their brand shopping. This was the largest increase amongst all observed categories with mass merchandisers taking share from apparel, shoes, and health/beauty. 

The ease and convenience of buying products across multiple categories at one store is perhaps exacerbated by the pandemic’s influence on social distancing, limiting time spent in stores. As we enter the second pandemic holiday season, it’s reasonable to expect that these shopping habits will continue.  

Say... Omni! 

Consistent with what we’ve seen in other analyses, the omnichannel customer is more valuable than the single channel customer. On average during last year’s holiday season, omnichannel customers spent $1,811 while in-store customers spent $810 and online only customers spent $899. 

It should come as no surprise that omnichannel marketing has really taken off. Last year, online shoppers represented 35% of total holiday spend. With consumer spending increasingly moving online, implementing an omnichannel retail strategy should be at the top of every marketer’s to-do list.  

Open for business 24/7 

Encouraged to stay home, consumers took to ‘clicks’ instead of ‘bricks’ to satisfy their holiday shopping needs in 2020. Compared to pre-Covid behaviors, online retail is up 131% showing customers have moved online and are staying there. Growth in online spend was accelerated by increases in number of purchases rather than basket size, proving the convenience of online shopping. It’s safe to say that omnichannel retail marketing must be the new normal. Consumers can make as many purchases as they want, whenever they want, even after hours. By adopting an omnichannel retail strategy, marketers are not just getting ahead of the game, they’re meeting their customers’ expectations to be able to shop when and how they want.  

Cardlytics sees $3.6T in annual consumer spend 

Because of our view into spend, Cardlytics can deliver provable return on investment in as little as 45 days. It’s time for marketers to leverage these seasonal shopping trends so that they can drive tangible revenue. Together, we can drive holiday loyalty through repeat purchases so that your brand can drive sales, increase customer loyalty, and grow market share. Contact us today to learn more!

More than 110,000 eating and drinking establishments closed in 2020 making the restaurant industry among the hardest hit during the pandemic. And the consistent theme I heard from the restaurant marketing execs I met with during this year’s Restaurant Franchising and Innovation Summit (RFIS) was the struggle to bounce back from a major disruption. As we head into fall and continue to work in an unpredictable climate, it looks like marketers will continue to face this challenge. Enter: omnichannel restaurant marketing, a strategy that will help brands simultaneously gain new customers and grow revenue in an increasingly fragmented marketplace. 

National food spend is down. 

Cardlytics analyzed the spending habits of U.S. online shoppers to help marketers navigate the changes in consumer spend that occurred across the broader food spectrum, including restaurants, grocery, meal kit subscription, third party delivery and non-traditional gas stations that feature mini marts. We learned national food spend declining by 2.5%, which would be the equivalent of all the restaurants in NYC closing for an entire year. Despite that, there have been tremendous opportunities for growth when restaurant marketing leaders were able to successfully target new customers. In other words, the upheaval reduced spending in the category, but opened the door to gaining new, high-value customers. 

This is the advice I shared with the RFIS audience during our panel, “How to use Technology to Acquire New Customers.” 

So how can restaurants win?  

Omnichannel marketing is a customer-centric approach that delivers a consistent, personalized experience for consumers across all your brands. During the pandemic, online ordering became increasingly popular. In 2020, 26% of restaurant purchases came through online channels as compared to 13% in 2019. And we saw this behavior continue even as restaurants and grocery stores began reopening, with online restaurant spend leveling out at 28% of total restaurant spend and grocery at 14% of total grocery spend. 

Now that many people are used to ordering via apps, mobile phones, and online websites, it is likely that this behavior will continue.  

Tip: Recognizing third party delivery apps impact margins but bring in new customers, restaurants should stop worrying about the perceived risk from those platforms and focus on converting in-store only customers to omnichannel via their owned channels. 

An effective omnichannel restaurant strategy means engaging with your customers where they are and accepting that third party delivery is just another touchpoint for you to deliver a seamless experience.  

Here are a few tactics to consider: 

Convert Customers to Omnichannel: The ‘omni customer’ is dining in-store and ordering online. These omnichannel customers tend to spend more than either an in-store only customer or an online only customer, spending 3X as much as a single channel customer on average! It’s obvious that the value lies with these diners.  

More consumers than ever before have shifted their spending habits online so why not take your advertising where they're already spending?

It’s a straightforward task for most digital marketers to cookie and target online customers (at least for now) but targeting in-store only to get them to try online ordering is trickier. At Cardlytics, we help marketers do this by identifying and targeting consumers who have charged a meal in-store with a cash back offer to make a purchase online, or to purchase through a brand’s app. By reaching these single-channel customers and converting them to omni you increase their value. 

Convert Grocery Customers: Grocery has increased their prepared meal offerings, further enticing consumer groups like families, gamers, millennials, and gen z, directly competing for a household’s take out or meal delivery business. And, with grocery share of food spend higher than it was pre-pandemic it continues to be important for restaurants to target these shoppers in an effort to bring spend back.  

Online grocery shoppers are another great conversion point. In 2020, 11% of grocery purchases came through online channels vs 5% in 2019. Restaurants should target these online shoppers to convert them to online restaurant delivery. This blurs the line between in-store and online. Things like digital payments or restaurant specific apps designed to make ordering easier are all ways to entice new customers that are already using technology to purchase within this category. 

Take Share From Your Competitors: Another major struggle that I heard from marketers at RFIS is how to target truly new or lapsed customers. The Cardlytics value proposition is probably most compelling when it’s used to target customers who’ve never interacted with your brand but are regulars at your top competitors. An offer to give your brand a try, whether in-store or online can bring in new customers who are very likely to become regulars.  

If these tactics make sense, but you’re struggling to operationalize them in today’s difficult climate, you should check out this webinar with Fast Casual from Kamron Moore, Cardlytics’ Senior Director of Restaurant Partnerships, Laura Sporrer, Teriyaki Madness’ Senior Marketing Manager, and Stephanie Bauer, The Piada Group’s Director of Marketing. You’ll learn how restaurant marketers are putting these tactics to work with great results.

The pandemic forced brands to innovate at lightning speed. Consumer trends expected to manifest in years, were compressed into months or even weeks, as shoppers dramatically shifted preference to convenience and online options. Everything from grocery shopping to fitness to entertainment moved online and disruptive direct-to-consumer (DTC) brands reaped the rewards. The big question is, "How did that affect customer loyalty?"

As the country gears up for its grand re-opening, we’re seeing a sizeable, and we believe permanent, change in how people shop.

Consumers are taking their money elsewhere.

The pandemic dramatically affected businesses of all types, but its impact felt very different depending on the business model. Cardlytics’ data shows, before lockdowns began in 2020, 8% of consumer spend could be attributed to DTC brands. That share has jumped to 14% from March 2020 to March 2021.  

Rural shoppers are spending as much as their urban counterparts.

Consider this: spend on DTC brands in rural areas now matches the spend patterns of our urban centers pre-COVID.

The rural in-store shopping experience isn’t known to be rich with options. The added layer of lockdowns during the pandemic further limited entry to traditional brick and mortar retailers and gave rise to DTC brands in rural areas. While the option to buy online isn’t necessarily new, the habits of these shoppers have changed far more rapidly than expected.

There is an urgent call to action for both traditional business as well as DTC. For the traditional business, hoping things revert to “normal” is no longer a viable strategy.

The Bottom Line:

Meet the customer’s needs on their terms, it’s more important than ever. Keep an eye out for changes in purchase behavior and consider the following questions:

• Are the number of retailers in a given category that have a share of the wallet increasing or decreasing?
• How are baskets changing value, frequency, timing of purchase, and channel of purchase, especially online vs. in-store?
• What are the changes in the channels of influence when looking at incremental return channel by channel?

Remember to:

• Re-assess customer loyalty and look at share of wallet for the category rather than simply frequency or amount of spend with their store alone.
• Focus on retention. Considering all the new customer growth, DTC brands must know if they’ve kept pace with competitor growth rather than benchmarking against their own revenue.
• Understand the point of true loyalty. A customer with only one purchase is more likely to be a trialist at risk of churn.

Thanks to the pandemic-led focus on health, safety and social distancing it was easy to bring customers in, but it’s vital that they don’t fall off and revert to old spending habits.