Category: eCommerce

Cultivating Loyalty Is More Challenging Than Ever: Here’s What Customers Want And Brands Should Know, According To The Latest Data

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Coke or Pepsi? Visa or Mastercard? Uber or Lyft? Apple or Android? Think about the brands you are loyal to. Does that allegiance extend to the exclusion of ever buying or using rival brands? Why or why not? What is it about commodity or luxury products and services that keep you faithful – and what would tempt you to switch?

Companies are working hard to understand this and it’s not easy. Both Gen-Z and Boomers have significant purchasing power (in 2020, consumers 65+ upped their online shopping by 53%), yet these generations sit on opposite sides of the preference and behavior spectrum (and individuals in those cohorts vary just as wildly). Legacy brands have armies of nimble D2C challengers nipping at their heels. The rapid shift to a new and permanent 1:1 economy is dizzying.

How do brands drive and maintain customer loyalty in the midst of ever-changing, oftentimes unpredictable market forces and shifting consumer demographics? To better understand what’s driving loyalty today and learn more about the ways in which consumers and brands are reacting to change, I spoke with John Hendricks, founder and CEO of ERGO.

John thinks a lot about the loyalty topic as some of the world’s largest brands such as American Express, Delta, Blackrock and Ameriprise have used his company to build long-term relationships and loyalty with consumers through the power of modern email newsletters. Together, we examined some of the latest data from Prosper Insights & Analytics.

Gary Drenik: Traditionally, we think about value (price relative to quality) as the main driver of loyalty. But are dollars and cents the only way for brands to compete and build customer loyalty?

John Hendricks: Brand loyalty is completely psychological, equal parts rational and emotional. On the rational side, there’s no getting past the fact that American consumers are definitely feeling the pressure of inflation. According to data from Prosper Insights and Analytics, a large percentage of consumers have noticed price increases across multiple categories from gas and groceries to pet supplies and prescription drugs.

Add to inflation the recent holiday gift-giving season, and it’s no surprise that consumers may currently be choosing cost savings over brand loyalty. Nearly one third (27%) of consumers across generations, Gen-Z, Millennials and Gen-X said they were buying more store brand/generic items due to price increases. 25% of Adults said they were doing more comparative shopping online.

Prosper – Doing As A Result Of Price Increases
Prosper Insights & Analytics

More than half of consumers across every generation except Millennials (48%) said that choosing familiar brands when buying clothes was not important.

Prosper – Familiar Labels Are Important
Prosper Insights & Analytics

On the emotional side it’s now more important than ever to make a strong impact with a solid customer experience. Household name brands (those that normally engender loyalty) will need to deliver more than discounts, rewards, and coupons. Brands can offer experiential rewards such as exclusive or early access to events or products that go beyond transactions and help drive deeper relationships and a sense of community with other customers.

Prices go up and down in tandem with economic cycles, but brands that find creative ways to offer incentives beyond fleeting discounts or irrelevant rewards will find it easier to maintain customer loyalty during tougher times or earn regular business back when wallets loosen up again.

Drenik: So, it sounds like beyond price, customer experience is a critical factor to winning and maintaining customer loyalty?

Hendricks: Absolutely. All consumers – even those in older generations – expect digital- first experiences in what’s become a highly on-demand culture. Brands that deliver speed and seamless omnichannel experiences consistently will have a long-term advantage when it comes to customer loyalty. Brands that get personalization right will also have a leg up.

However, good CX today goes beyond just selling and focusing only on triggered marketing messages. Consumers crave tangible value beyond the sale and it’s important for brands to predict customer needs and delight them with information they didn’t already know.

Transactional messages drive sales, which are no doubt important. Brands are in business to make money. However, experiences focused on relationship building and rooted in brand values will increase total CLTV (customer lifetime value), which is important for brands especially in high churn industries like technology, CPG, and financial services.

Drenik: Let’s shift gears and address the point of brand values. Many brands have stepped up in recent years to demonstrate that they share the same social values as their customers. Should we expect this trend to continue in 2022?

Hendricks: Corporate social responsibility matters. This has come into stark relief over the past two years with various social movements that have sparked conversations around sustainability, equity, and inclusion. Prosper Insights & Analytics found that a quarter of Gen-Z and Millennials will increase spending with a brand that takes a strong stand on a social issue they support.

The numbers are even more significant when it comes to environmental issues, with nearly 30% of Adults 18+ reporting that they’ll spend more with brands that are environmentally responsible.

These current numbers aren’t as high as other industry studies and again may reflect the tight financial times many consumers are in. However, these stats underscore that even during tough times, brands that maintain, demonstrate, and communicate their values can still garner a larger share of wallet and long-term loyalty. Authenticity is also key. Consumers are very good at sniffing out fake attempts to embrace Corporate Social Responsibility (CSR) by brands and that almost always backfires.

Drenik: Any final thoughts or tips about cultivating loyalty in 2022 and beyond?

Hendricks: I can’t help but come back to the importance of getting personalization right as a driver of loyalty moving forward. Us folks in the marketing technology world know how much of a buzzword it’s become, but there’s such a strong opportunity to rethink what personalization means and how to approach it in a way that provides the best customer experiences while respecting privacy. Much of this will be driven by Artificial Intelligence and we are just at the tip of the iceberg in terms of what these loyalty-driving experiences can and will look like.

Drenik: Thanks for your time and expertise, John. It will be interesting to see how things continue to unfold in the coming year.

This article was written by Gary Drenik from Forbes and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

What Do Consumers Want In 2022? Retail Analysts Reveal Shifting Behaviour

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What do consumers want in 2022? New research examines how customers behaviour has shifted during the pandemic, and what this means for how retailers should interact with them.

The past 18 months has reshaped the retail landscape and sent retail analysts into overdrive trying to understand how consumers behaviour has adapted and shifted during the pandemic.

What was once accepted truths about shopper’s habits have been disrupted, and understanding what this means for big or small retailers is paramount in 2022.

Capgemini’s new report ‘What Matters to Today’s Consumer’ helps unpick changes in consumer behaviour, and understand what might be temporary or more permanent shifts. It highlights how the ‘conscious consumer’ is becoming commonplace and emphasises the impact of ongoing supply chain issues and cost of living increases.

Supply chain issues set to continue

In late 2021, business leaders from a range of sectors told the House of Commons business, energy and industrial strategy committee that small businesses would bear the brunt of labour shortages and price rises until 2023.

Tim Bridges, global sector lead for consumer products, retail and distribution at Capgemini speaking via email, underlines what is at stake. “Retailers mustn’t take their eyes off supply chain challenges this year. They can spend huge amounts of money marketing but if the product availability is constrained it’s all for nothing”.

He adds that “fifty-four per cent of consumers prefer local or regional products" and highlights that a move to a more localised supply chain "not only drives brand purpose but also creates agility and flexibility to be able to deliver in supply-constrained scenarios.”

Cost of living sky rockets

Consumer spending has been a major driver of the economic recovery, but with consumer confidence dropping to its lowest level in 11 months as people worry about surging inflation and fuel bills, there are suggestions that rising living costs will slow the household spending recovery.

Bridges explores how retailers are tackling this issue. “We are starting to see two different approaches to tackling price rises. One is a move to subscription models. Here, price increases are spread out over time. The other is to let consumers decide – do they want what they’re after, or an economy option? Often, consumers still opt to pay a premium – as long as they are offered a choice.”

The holy grail – brand loyalty

Brand loyalty, the ability of retailers and brands to retain customers, is highlighted as a key to success in Capgemini’s study. Accenture also examined brand loyalty in a recent report on the impact of the pandemic, looking at how we want to consume has been shaped by the seismic shifts in how we live.

Accenture’s work notes that the pandemic encouraged consumers to look inward, “elevating concepts of relationships and responsibility and re-evaluating their priorities.

It highlighted how these "new mindsets are shaping where, what and how consumers buy, which companies must be acutely aware of as they aim to build loyalty with the consumer in 2022. Through their purchase choices, they are purposefully seeking to influence their communities and the environment, and to confirm how they see themselves in the world."

Bridges agrees, noting that as well as being aware of what is driving today's consumers, retailers must stay tuned in to what customers are saying and thinking. Consumer product companies have many more avenues today to promote brand awareness and loyalty that’s additive to the retailers selling their products. The most active channel is social media, both for promotion and for understanding consumers’ reaction in
real-time – and, therefore, being able to make adjustments just as quickly”.

Consumers know what they want

Today’s consumer expects many things for the businesses they buy from. The ethos and ethical standing of not only the product but the company is extremely important to them. In addition to aligned values, they also want convenience. Whether that’s a multi-channel experience with fast, easy delivery and fulfillment alongside straightforward, multi-payment options, the bar has been set high.

The key to success in 2022 will be recognising that these demands exist, and plotting a course to not only meet expectations, but exceed them in ways that build trust and loyalty.

This article was written by Catherine Erdly from Forbes and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

Ignore the doomsayers – brand purpose still beats out bombardment

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On any given day, up to 10,000 discrete advertisements bombard consumers during their waking hours. Consumers – especially the youngest generations – are expecting more from these messages than just details about the latest seasonal sale. But this begs the question: is it possible for brands to prioritize purpose-driven initiatives without sacrificing business performance?

These initiatives serve as an effective way to win customers – and as a gateway to growth. According to research conducted among C-Suite executives and consumers as part of Deloitte’s annual Global Marketing Trends Report, consumers are becoming more discerning about whether a brand supports diversity, equity and inclusion both publicly and internally. Because marketing and advertising often serve as the face of what a brand stands for, marketers have an opportunity to elevate equity inside and outside of their organizations.

Making DEI commitments in all spheres of influence is key to effective branding

In our survey of 11,500 global consumers, we found that the youngest respondents (from 18 to 25 years old) took greater notice of inclusive advertising, while non-white respondents were up to two-and-a-half times more likely to be aware of a brand prominently promoting diversity when making a purchasing decision. But it’s not enough to just market inclusiveness or diversity – our results also show 57% of consumers are more loyal to brands that commit to addressing social inequities in their actions. Appealing to the loyalties of future customers can require brands to demonstrate they are promoting equitable outcomes in all their spheres of influence: in the workforce via hiring and retention, in the marketplace using diverse suppliers, or in society through meaningful community partnerships.

The impacts of measurable DEI commitments are highlighted by high-growth brands (defined as those with annual revenue growth of 10% or more), which are more frequently establishing key performance metrics for DEI objectives than their lower-growth competitors. Notably, in our survey of over 1,000 global executives, we found that the highest-growing brands are committed to achieving equitable outcomes across all their areas of influence – workforce, marketplace and society –in ways their lower-growth peers are not.

Additionally, 27% of high-growth organizations have established equity metrics for community investments (versus 18% for negative-growth organizations) and 38% of high- growth organizations have established similar metrics for their brand messaging campaigns (versus 30% for negative-growth organizations).

These demonstrable commitments to DEI can help bolster brand visibility, prominence, and trustworthiness among its consumers – particularly its youngest demographic. An overwhelming 94% of Gen Z consumers expect companies to take a stand on important social issues. Without legitimate commitments to DEI in all spheres of influence, attempts at inclusive marketing or promotion of diversity can fall flat and appear disingenuous to consumers who are expecting more from the brands they purchase from.

Elevating equity inside and out

How can marketers avoid the pitfalls of hollow messaging and win the hearts of consumers? We’ve highlighted three actions across an organization’s ecosystem.

Firstly, ensure teams and suppliers reflect your market. Marketing teams – both internal and external – that closely reflect the markets they serve can reduce the cultural and demographic distance between the brand and the consumers they aspire to reach.

Secondly, bring a diversity of voices to the organization. Chief marketing officers should use that position of influence to continuously monitor and bring the needs of underrepresented communities to their organization – and feature those voices and faces in campaigns.

Finally, make your commitments measurable. Ultimately, no amount of messaging can help a brand overcome the hurdle of being labeled disingenuous. One way to solve for this is to make sure your DEI goals are not just checking a box but creating real, measurable outcomes.

In the end, future generations and increasingly diverse communities are expecting more from the brands that they support. Simultaneously, the highest-growing brands are reducing the cultural and demographic distance between the makeup of their teams and the markets they aspire to reach. Marketers can help their organizations not only hone their messaging but also support their company’s transformation to a more equitable, diverse and inclusive organization, thereby underpinning their brand messaging with authenticity.

Christina Brodzik is a principal at Deloitte Consulting.

This article was written by Christina Brodzik from The Drum and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

Three Ways The Future Retail Store Will Change

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The fundamental role and purpose of retail stores are changing. Digital transformation forced brick-and-mortar outlets to evolve as more of the path to purchase shifted online. Now, as e-commerce expands, retailers are
reimagining the functionality of stores and tapping into digital tools to keep those stores relevant.

Physical retail will remain the largest and most important channel for the foreseeable future, but how space is leveraged will transform. In Euromonitor’s recent Commerce 2040 virtual event, Jason Goldberg, chief commerce strategy officer at Publicis, noted that stores are no longer a singular touchpoint in the shopping journey; now, stores play several roles, becoming platforms that serve multiple missions and stakeholders.

Recently, retailers have reduced footprint entirely or used physical outlets to support online fulfillment operations or branded experiences. Personalized, immersive and collaborative concepts will advance the store experience of
tomorrow.

Check in before check out

A hallmark of the future store will be identifying the customer at check in rather than check out. Historically, stores have not been equipped to detect the identity of a shopper until payment, limiting the ability to personalize in- store shopping trips.

In the future, facial scanning will recognize customers upon entry, enabling retailers to tailor the in-store experience based on personal information and purchase history. As of 2021, one-third of global digital consumers are open to companies using facial recognition software to personalize in-person interactions, according to Euromonitor International’s Voice of the
Consumer Digital Survey:

This sentiment is strongest among younger cohorts—40% of millennials are comfortable using this technology to power more personalized interactions. Leveraging facial recognition across the store will allow associates to assist consumers with product choices in the context of what they own , for example.

Experiential ticket entry

Retailers will leverage technology to remove the hassles of shopping for mundane items while tapping into the innate desire and curiosity to test and try before buying. For products that require more consideration, such as furniture or electronics, physical retail will shift from stores where products are sold to a stage for immersive brand experiences.

In recent years, consumers adopted a minimalist mindset, prioritizing experiences over continued accumulation of products. In fact, 46% of global consumers would rather spend money on experiences rather than things, and this percentage increased 10 points in the last five years, according to Euromonitor. Creating unique engagements have the potential to generate new revenue streams. For example, consumers could go to a sports-themed experiential center and compete against top athletes in an alternate reality experience. Retailers looking to capitalize on this concept will need to create a playground-like atmosphere that ensures the experience matches the price tag.

Community collaborations

Brick-and-mortar outlets can become places where store associates and shoppers come together to design and co-create products. This in-store experience will emphasize onsite product customization for the end- consumer. Shoppers may be able to pick specific colors or textures for shoes, clothes or accessories to create the ultimate one-of-a-kind product.

Retailers that focus on community collaborations could also drive sustainability and target values-based buyers. Globally, 32% of consumers will buy from brands that support social and political issues that align with their values and 27% will go so far as to boycott brands that do not, according to Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2021. This store concept presents the opportunity to bring consumers employees and local experts together to collaborate on circular projects that repair or upcycle previously purchased items.

“The store will become more of a hub of a community in the future,” Emily Xu, chief marketing officer of Mitchell Gold + Bob Williams, said during Euromonitor’s event. Xu noted that this type of in-person experience could be used to teach consumers about concepts like sustainability.

The retail store of tomorrow

Stakeholders operating across retail need to rethink long-term strategies. While the first wave of digital disruption was about how stores could compete with e-commerce, this next wave will be about integrating and uncovering synergies. Data will be key to providing the necessary business agility to do so.

“If you cannot move quickly on the real-time prescriptive recommendations that are coming to the store or restaurant, it is all for naught,” Barry Thomas, head of international customer marketing and future of commerce at The Coca-Cola Company, emphasized during the aforementioned event.

In the future, retail outlets will be multidimensional, with stores simultaneously operating as transactional, fulfillment, engagement and branding spaces.

This article was written by Michelle Evans from Forbes and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

3 best practices for retailers expanding from online to in-store

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As the world reopens, retailers are focused on safely welcoming back customers and resetting operations. Many brands, including digital pure plays, are eyeing new customer journeys and new business models. 

For example, Fabletics and Amazon are taking advantage of retail real estate vacancies and launching or expanding their physical presence. To the surprise of many pundits, physical store expansion plans continue to outpace closures. According to U.S. store tracking by Coresight Research, national retailers have announced 3,199 store openings and 2,548 closures year-to date. 

The evolution of e-commerce brands to omnichannel retailers has been measured. Many are new to store operations and the realities of in-person experiential retail. This will demand they form new capabilities and competencies that meet the customer wherever they are and on their terms.

Let’s explore several best practices for success as retailers adjust to the real world. 

Understanding consumer expectations  

Shopping pathways and buying psychology vary dramatically by customer journey. For many, shopping is a social connection and an interpersonal experience. At the same time, online shopping may offer more convenience; discovering products while browsing is a key factor that brings consumers in store. 

Before the pandemic in the 2019 Oracle Retail consumer study, 36% of consumers ranked discovery as a space to experiment and try new products and a top priority on their shopping journey. Also, as state restrictions lift, consumers return to stores, and brick-and-mortars need to have fully stocked inventory ready for the influx. If retailers can’t provide, shoppers will take their wallets elsewhere. According to a 2021 Oracle Retail study, 34% of respondents said out-of-stock merchandise topped their list for a bad shopping experience, 33% said they weren’t willing to wait for an item to be back in stock before trying another brand, and 27% will go to another retailer. 

Even as they return to stores, shoppers are still focused on health and safety. Today’s consumers demand a clean and healthy environment while on their shopping journeys. This isn’t an issue that e-commerce companies will have encountered online; however, this will need to be a top priority for brands looking to pivot. According to the same 2021 Oracle study, 80% of shoppers are ready to shop in a retail store as long as safety precautions are in place (e.g., wearing a mask, cleaning procedures, etc.), with 28% of shoppers reporting a lack of social distancing/unclean environment would result in a bad shopping experience. 

Incorporating retail technology  

As digital brands are extending their operations to the main street, they bring a wealth of technology and insights. e-commerce offers brands countless ways to personalize the shopping experience and provide convenience to consumers. Direct to consumer brands and pureplay retailers will need to figure out how to translate these strategies to real life in the offline world. Digital brands looking to pivot will need to reimagine how their online strategy will work in-store. Utilizing the right technology is vital, and choosing a robust POS and retail platform is integral to successful in-store operations. It is not as simple as adding a cash drawer to your website and hoping it all goes well. 

No matter the channel, customers want convenience in their shopping experience. As consumers will far outnumber store associates, retailers looking to pivot will need to explore innovative options, such as self-checkout, BOPIS, pay-by-link, pay-by-QR code, and other tech-forward ways getting customers out the door.

Instead of spikes in web traffic, new brick-and-mortar retailers will need to anticipate the ebbs and flows of in-store demand. These retailers should consider demand forecasting technology to predict everyday traffic and get ahead of the busy end-of-year holiday season. They will need a system that utilizes next-generation retail science and exception-driven processes to predict demand accurately. 

Upgrading with staff training  

As new brick-and-mortar stores open, retailers will naturally need to hire and train new staff to keep up. However, for the road ahead, staff training will need to go beyond the basics and be integral to physical stores’ success. As vaccinations usher in return to normalcy for retail, store associates who came aboard during the pandemic will need to adapt to growing foot traffic and the associated demands. 

Customers will want to know where every product is, what discounts are available, if more stock is in the back, and which check-out lane is the quickest. They’ll expect the associate to handle every inquiry and meet every demand quickly. For example, 44% of consumers ranked unhelpful staff as defining a bad shopping experience, which shows how imperative knowledgeable staff is, per the 2021 study. 

Store associates will need to be well-equipped to handle all expectations and questions that come their way. Retailers moving from online to the real world can help bridge the gap by integrating mobile devices or tablets for associates to use, putting information at their fingertips. These devices can help staff locate items and inventory, highlight customer profiles and suggestions to help associates provide better service, and can even serve as the point of sale for check out. Training staff for this experience will be imperative so associates can make the most of in-store technologies and leverage them to provide an excellent customer service experience. 

Breaking into brick-and-mortar can be an exciting next step for e-commerce brands, but it requires proper planning and preparation. Customers, and their needs, are different in each arena, and retailers will need to understand how to cater to the two. As digital retailers step into the real world, ultimately, they will need to anticipate the behaviors and demands of in-store consumers, incorporate technology to offer a more seamless experience, and train their staff adequately to make the entire customer journey worthwhile. With the world moving towards reopening, it’s time to step into (or back into) the real world and prepare for the future of retail. 

Millennials and Brand Loyalty

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Why is brand loyalty important? For any business, large or small, customers matter. One of the main goals for many it to ensure customers continually come back for product or service. That’s why building brand loyalty is of the utmost importance. While there are hurdles to get any age group to become brand loyal, Millennials can be a complicated group to convince to commit. Here are some tips on how to increase brand loyalty among the age demographic.

Get to Know Millennials 

Compared to Baby Boomers, you may have the perception that Millennials go rogue on brands. While they are more likely to experiment with different businesses, Millennials actually want to be brand loyal. In fact, they’re 1.75x more likely than Boomers to say they’d like to be brand-loyal. So what’s stopping them? 

Income 

One factor is income. It may come as no surprise that as household income increases, so does the likelihood of loyalty. In a survey by Facebook IQ, people surveyed who report a household income of $150,000 or more are 32% more likely to be loyal than those who report a household income of under $35,000.  A higher income brings flexibility in choices. With more money, you have the ability to pick companies that match your values, meet your needs, and deliver on promises. If you don’t have a lot of wiggle room in the budget, you may need to shop around for desirable sales and cost effective options more often. 

Verticals 

Vertical markets, or “verticals,” are business niches where vendors serve a specific audience and their set of needs. When we look into specific verticals, we can see some variations among Millennials. Furthermore, in some verticals Millennials are just as likely to be brand loyalists as Baby Boomers. 

Looking into verticals where experience and price play a bigger role, we lose loyalty among the age group. For example, this can include airlines and hotels. Here are more barriers Millennials face when making the decision to stay loyal within different verticals. 

  • 2.00x more likely to cite a store’s level of hygiene as a barrier for  HOTELS 
  • 2.00x more likely to cite a lack of healthy options as a barrier for  RESTAURANTS 
  • 2.50x more likely to cite a store’s level of hygiene as a barrier for  GROCERY 
  • 1.44x more likely to cite a move in location as a barrier for AUTO INSURANCE 
  • 2.33x more likely to cite a difficulty to reach or contact as a barrier for AIRLINES 

New Parents 

Another factor that impacts how Millennials spend in a huge way is whether they are parents. When a child is in the mix, a customer is going to be hyper aware of what they are spending where. They will be looking for the best fit for their family. Once they find it, they’ll typically stick with it. In fact, 42% of  new parents describe themselves as loyal compared to 36% of non-parents. 

Interestingly enough, new parents tend to be more loyal in verticals that non parents are not as loyal in, like hotels. This is especially true of verticals with products and services that tend to be more experiential. Based on Facebook IQ’s study, our best guess is that the desire to experiment with different businesses gets replaced by the need for stability. Parents want to stick with what they know works and cut out the other fuss. 

How Can I Build Brand Loyalty? 

Those surveyed were asked, regardless of household income, to describe the brands they love most. When divided into features of brand loyalty – consistency, cost, quality and experience – the largest group of words was under experience. Though price matters, experience seems to outweigh them all. 

Experience 

Be sure to put focus on delivering an exceptional experience, no matter the service or product. According to the study, creating a meaningful, memorable and noteworthy experience is critical to cementing a brand’s relationship with people. Also consider ideas that celebrate the good times had between you and customers. 

Personalization 

You can also connect through personalized communication. This is one way to build trust. Use personalized service through 1:1 communication. Companies are increasingly using messaging tools to better meet the needs of their audiences. 

Authenticity 

Because of the digital sphere and online technology, people are oversaturated with advertisements 24/7. Now, they crave realness. When a brand is authentic and transparent, it stands out against the noise. In fact, 66%  of consumers think transparency is one of the most attractive qualities in a brand. And in a study run by Cohn & Wolfe, 63% of consumers said they would rather buy from a company they consider to be authentic over a competitor.

Foursquare partners with Shopkick to enhance in-app experience and more

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Shopkick will use Pilgrim SDK and FSQ/Places Database to help brands and retailers uncover consumer insights and deliver more rewards to app users.

With the holiday season upon us, shoppers are on the hunt for the best deals and rewards – both online and in-store. Meanwhile, after many months of shifting consumer behaviors due to the pandemic, retailers are in need of data that can provide consumer insights, purchasing habits, and preferences. To help guide customers as they shop and help businesses better understand consumers’ shopping behaviors and needs, Foursquare is announcing its partnership with Shopkick, a leading shopping rewards app.

Come 2022, Shopkick will launch a revamped new app experience using both Pilgrim SDK and Foursquare Places data. Foursquare’s technology and data will enable the Shopkick app to deliver relevant, insightful push notifications and branded content directly to app users based on their location. The result? Greater rewards for shoppers and richer consumer insights for businesses.

How Does The Shopkick App Work?

Shopkick is a mobile rewards app that was acquired by Trax, the leading provider of retail computer vision solutions and analytics, back in 2019. The Shopkick app sends proximity-based push notifications to help lead the shopping journey, encouraging customers to take certain actions like enter a specific store or engage with in-aisle and branded in-app content. The app’s “kicks” feature enables shoppers to earn rewards and gift cards by simply purchasing products and uploading the receipts.

Additionally, this mobile experience helps Shopkick’s brand and retail partners learn more about their customers and determine how best to engage with them.

Leveraging Foursquare’s Location Data Technology

Prior to partnering with Foursquare, Shopkick had previously relied on a combination of in-house solutions and external tools – such as geofencing – in order to identify customer presence in a store to provide relevant in-app and proximity messaging.

Foursquare will now be the sole provider of Shopkick’s location capabilities with our Pilgrim SDK, which includes our unique Snap-to-Place technology — an algorithm trained by more than 15 billion signals over the past 12+ years that is able to more accurately determine where and when a mobile device visited a venue compared to geofencing and other technologies that rely solely on GPS signals. Our proprietary mall mode feature, for example, allows our Pilgrim SDK to more accurately identify visits to “super venues,” which are locations of extreme density that often encompass several other venues.

This level of precision is especially useful to apps like Shopkick, whose users frequent malls and other commercial venue-dense environments.

Shopkick will also be utilizing Foursquare Places as their system of record for layering their own data, deals, rewards, merchant database and more.

“Foursquare’s technology not only helps accurately reach Shopkick users but also gives them the opportunity to earn kicks at more places,” said Sheila Mefta, Vice President of Product and Design at Shopkick. “In the testing phase, Shopkick found Foursquare’s Pilgrim SDK to be extremely accurate in identifying thousands of unique locations out of the box, making this partnership with their stellar team a no-brainer.”

Using Location Data To Bridge The Gap Between Brands With Consumers

Shopkick’s ultimate goal is to engage with customers at the right place and right time, and Foursquare will help it do just that.

“Shopkick is a leader in mobile retail beloved by many millions of consumers — their team carries wide-ranging expertise with location technology and this partnership only further validates Foursquare’s market-leading position,” said Patrick Hu, Managing Director, Business Development & Product Partnerships at Foursquare.

The partnership additionally opens the door for greater business opportunity and growth. Location data continues to help drive real, impactful business results and Foursquare’s work with Shopkick will help generate new or greater collaboration with brands and retailers.

“2022 will prove to be a critical year for retail and other brick-and-mortar industries that were heavily impacted by the pandemic,” Hu said. “As consumers have shifted toward on-demand delivery, location technology and data have become vital components for bridging the online-to-offline gap and delivering a high-value in-person experience. Foursquare looks forward to collaborating more deeply with Shopkick and other Trax solutions, along with others across the broader mobile and retail space.”

Shopkick is available for free on iPhone from the App Store and for Android from Google Play. For more information, please visit www.shopkick.com.

2022 Shopping Outlook: Consumers Tightening Their Budget and Spending Less Overall

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Shopkick survey finds that continued inflation and supply chain issues are concerns for consumers heading into the new year  

As a new year approaches, it is apparent that the economic challenges of 2021 will continue to influence consumer behavior in the future. Supply chain hiccups and record-breaking inflation are just a few of the factors causing Americans to plan to spend less in 2022 and have already impacted how they chose to shop in 2021. According to the Adobe Digital Economy Index, Black Friday foot traffic was up 48 percent and overall online spending was down compared to 2020 — a direct result of consumers’ supply chain concerns. In addition to finding ways to avoid supply chain challenges, the majority (63 percent) of consumers lowered their budgets in 2021 and unfortunately, 45 percent do not anticipate their spending habits will return to “normal” in 2022.

Shopkick, a leading shopping rewards app, surveyed more than 14,000 consumers across the country from November 5 – November 9, 2021, to gain insight into consumer behavior and outlooks as we approach 2022.

Key Findings Include:

  • Tightening Budgets: When asked what spending habits they foresee themselves making in 2022, the majority of consumers (69 percent) said they will be spending less overall. Most consumers (58 percent) plan on approaching their finances by proceeding with caution and 22 percent are significantly tightening their budgets. Overall, 23 percent of consumers will be decreasing their non-essential spending entirely.
  • In-Store Shopping Remains Strong: Despite the popularity of online shopping in recent years, consumers still expect to do the majority of their shopping in physical stores. Most plan to purchase both non-essential (71 percent) and essential items (87 percent) in brick-and-mortar stores and the majority (59 percent) of consumers view in-store shopping as an event or something to look forward to as life returns to “normal.”
  • Searching for Savings: To maximize savings in 2022, consumers will purchase sale or discount items (58 percent), use shopping and rewards apps more frequently (56 percent), and prioritize shopping at budget-friendly stores (51 percent). Consumers also plan to purchase more store brand products instead of larger brand names (35 percent).
  • Learning from Last Year: Of those 22 percent tightening their budgets, almost half (49 percent) are doing so because they feel less financially stable and are unsure what the future holds (49 percent). Nearly all consumers are concerned about the risk of continued inflation (96 percent) and supply chain and product shortage issues (95 percent).
  • Safety is Still a Priority: Though Covid-19 vaccines are widely available to the public, health and safety precautions continue to be important to consumers. More than half (55 percent) of shoppers say retailers’ health and safety guidelines will play a role in where they choose to shop in 2022.
  • Treat Yourself: For the 22 percent of consumers that will be increasing their non-essential spending, they are doing so because they feel more financially stable and have a more flexible budget (47 percent), plan to spend more on experiences like dining, travel, or entertainment (34 percent), or plan to spend more money on other people (27 percent).

Generational Insights

  • Conscious Consumers: Many consumers (36 percent) anticipate shopping more frequently and spending more money at retailers and with brands that align with their core values (politically, socially, etc.). Generationally, Gen Z (53 percent) is most likely to shop more frequently at retailers or with brands that align with their core values (politically, socially, etc.), followed by Millennials (42 percent).
  • Proceeding with Caution: Health and safety guidelines will play a role in 60 percent of Gen Zers shopping choices, followed by 65 percent of Silent Generationers, 53 percent of Gen Xers, and 50 percent of Baby Boomers and Millennials.
  • Young Money: Of the 22 percent who expect their non-essential budget to increase in 2022, Gen Zers are the most likely to do so (59 percent), as they feel more financially stable and have a more flexible budget. Of those Gen Zers increasing their budget, 36 percent plan to spend more on experiences like dining, travel, and entertainment now that these non-essential businesses are back open.

“After a tumultuous turn of the decade, 2021 was a critical juncture for retailers and brands to strategize for the new year and beyond,” said David Fisch, general manager of Shopkick. “The findings from this survey continue to tell us that physical retailers reign supreme and health regulations that help people feel more secure remain essential. They also further reveal the need for seamless, omnichannel shopping experiences that help consumers save as much as they can, especially when the economy makes it difficult.”

About Shopkick, Inc. 

Shopkick, a Trax company, is a leading shopping rewards app, bringing moments of joy to everyday shopping – both on- and off-line. For brands and retailers, Shopkick provides high consumer engagement along the entire path to purchase. The company’s unique pay for performance model has been proven to deliver high ROI, while driving incremental traffic, product engagement, and sales. Some of its leading brand and retail partners include Kraft-Heinz, Barilla, GE, Kellogg’s, TJ Maxx and Unilever, among others.

Shopkick is available for free on iPhone from the App Store and for Android from Google Play. For more information, please visit www.shopkick.com.

Is the fun ever coming back to holiday shopping?

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In terms of sales, last year was a much better holiday than most predicted. Tepid expectations for the season gave way to 8.3% growth, according to the National Retail Federation. But it wasn’t a particularly joyous season, with many concerned for the health and safety of their families as the pandemic raged across the U.S., and the world waited for vaccines to become available. 

Shoppers stayed home in large droves, buying holiday gifts online instead, and retailers tried to encourage safe buying behavior through curbside pick up options and other conveniently distanced methods of purchasing. Retailers reimagined traditional holiday activities virtually, and customers accepted things were going to be a bit different than usual. 

This year, there are signs of a return to (somewhat) normal. Macy’s Thanksgiving Day Parade is allowing spectators once more. The department store’s Santaland is back, offering children the chance to share their lists with Santa Claus like years past. And yet, it’s still not quite like years past.

The pandemic is still with us, and the delta variant has raised consumer concerns as shoppers prioritize staying safe. 

“For retailers hoping for a return to the good old days of 2019 we have a double dose of bad news,” Alvarez & Marsal wrote in a consumer sentiment report this October. “Not only is consumer spending muted but the changes in shopping behaviors – brought about by Covid and fears of social contact – are here to stay.” 

Most (85%) of shoppers are intending to either continue or accelerate the shopping behaviors they picked up during the pandemic, including BOPIS and curbside, the firm found. That leaves just 15% that expect to “fully revert” to their old shopping habits. That could mean more e-commerce once again, which grew massively for most retailers last year as consumers stayed cloistered in their homes. 

And many consumers are still concerned about their finances as well. Alvarez & Marsal found that “overall consumer optimism is weak,” with about 58% of shoppers expecting their family’s financial situation to either stay the same or worsen in the next six months. 

With the pandemic still haunting the public, and financial concerns hanging over consumers’ heads, it’s hard to say whether the “joy” of the season will return this year. There are some signs, at the least, that it won’t be as disrupted as last year. 

“Right or wrong, there’s a certain sense of security among us. Those that are vaccinated feel a little more confident in getting out,” Brendan Witcher, vice president and principal analyst at Forrester, said. “All you have to do is go to any shopping mall, even now, ahead of the holidays, and you’re going to see that people are out, they’re shopping, they’re buying, they’re spending time in stores.” 

‘No one wants Santa to be a superspreader’

With vaccines becoming widely available in the U.S. this year, the holiday season will, in some ways, be very different than last year’s, when the threat of a pandemic surge kept many shoppers home instead of visiting family or out in shopping centers. But the behaviors consumers picked up during the pandemic haven’t necessarily left, and health concerns are still dogging consumers. 

Alvarez & Marsal’s recent study found a third of respondents cited health concerns as a reason they wouldn’t be shopping as much as they might like to, while a recent U.S. consumer sentiment report from McKinsey found a  majority of shoppers were growing wary once more of out-of-home experiences and embracing the “homebody economy.” 

Shopping in stores is still causing anxiety for 40% of shoppers, according to a recent Deloitte report, though that is down 11 percentage points from last year. And some are predicting that e-commerce will rise once again this year, despite huge growth in e-commerce last year.

In that environment, retailers are tasked with not just creating holiday experiences, but ensuring they feel safe enough for shoppers to participate. Hence, why even though Macy’s Santaland is technically back, kids won’t be invited to sit on Santa’s lap this year. They’ll be sharing their Christmas lists from six feet away. 

“No one wants Santa to be a superspreader, right? That would be probably the worst headline of the year,” Witcher said, noting the precautions are smart on Macy’s part. 

The sight of masks on shoppers or volunteers might be a reminder of the pandemic, but most consumers are so used to them that they’re relatively invisible and likely won’t impact the enjoyment of the event much, according to Witcher. The cheer and overall excitement of visiting Santa is also about more than just the opportunity to pose for a photo. 

“Sitting on Santa’s lap is maybe an iconic part of visiting Santa, but it’s [also about] stepping into that space that’s decorated, has a tree, has some snow, has some presents, has the music – and all of those things can come back,” said Karthik Easwar, associate teaching professor of marketing at Georgetown University. “Even if you’re standing six feet from Santa, telling him what you want for Christmas.” 

To Easwar, these kinds of precautions around traditional holiday events allow shoppers to, by and large, return to their usual family traditions, even if they only get “90%” of the experience back. Compared to last year, 90% is a lot. 

Lauren Bitar, head of insights at RetailNext, pointed to the ability to control occupancy as another way to adapt holiday experiences to a year still partially impacted by the pandemic. That not only prevents stores from being overcrowded but also helps associates to “better control the experience”  during a labor shortage that’s making it difficult for retailers to find workers. 

The amount and level of precautions may also depend on what other retailers are doing about a certain issue. Consumers and retailers both tend to operate based on crowd wisdom around the pandemic, according to Witcher, and that will likely continue, with retailers adding or axing precautions as others in the space do. 

“I would not be surprised if we see the trends to outdoor holiday experiences increase – and I’d say that’s twofold,” Easwar said. “One, it gives a level of comfort or safety to the experience that it is outdoors instead of indoors, that you might be able to space out a little bit more than you would in a confined space. I think the other side of it is, broadly speaking, a lot of people have been cooped up for 18 months, so just being outdoors is nice.” 

Will cheer be back in holiday marketing this year?

Outside of navigating in-person activities, retailers will have another difficult year of striking the right tone through their marketing. The pandemic isn’t gone, but the U.S. is not in the same place it was last year with fears of COVID-19 running so high that the usual cheerful holiday marketing felt out of place. McKinsey’s recent report on consumer sentiment found that overall optimism regarding COVID-19’s impact has increased this year, but pessimism has also edged up. In August this year, 43% of respondents expressed optimism about the U.S. economic recovery after COVID, while 16% expressed pessimism and 41% had mixed feelings. 

“Last year was really important to not be tone-deaf to the situation,” Witcher said. This year, however, will be different, with brands perhaps encouraging alternate channels like BOPIS and curbside rather than necessarily acknowledging the pandemic. “That’s a smart move because it’s saying that the pandemic is still here, but it’s not [explicitly] saying the pandemic is still here. Because it’s not obvious to the consumer that I’m being told to use buy online, pick up in store or curbside or ship-to-home for the pandemic. I’m getting told that, well, just because.” 

Another slightly more covert message this season may tie into the supply chain. Retailers have already begun pushing consumers to shop earlier this year, and the full extent of supply chain challenges has become so well-known that consumers are even anticipating stockouts. Even so, retailers can be smart about what they’re promoting to consumers without necessarily spelling out their challenges to shoppers. 

Encouraging consumers to shop early will allow retailers to gain insight into trending products to place their final orders early this year, according to Witcher, and store-wide discounts or category-wide discounts will allow retailers to offer promotions without running into inventory shortages. In anticipation of inventory challenges, Bitar expects the sense of urgency in holiday ads to accelerate this year as well. 

“There’s always that in the holidays anyway, but this season it’s like: ‘This is going to fly. We don’t have a lot of it. Start your shopping now,'” Bitar said. “It’s very much like they’re riding the line they always love, which is ‘Get it now before it’s gone,’ but to the umpteenth degree.” 

Some retailers are also returning to more merry marketing initiatives. Nordstrom in October announced its holiday campaign, “Make Merry,” which “was inspired by the happy, sometimes hilarious mid-revelry moments that turn the season into a celebration.” The campaign shows families and friends “experiencing real joy and connection” by being together. 

Neiman Marcus is likewise centering on the “sentiment of celebration and cheer” with its holiday campaign, “Celebrate Big, Love Even Bigger.” Chief Merchandising Officer Lana Todorovich specifically noted that consumers would be “celebrating in person again” this year with friends and family, and the campaign video is focused on love and togetherness. 

Add J.C. Penney, too, to the list of retailers reaching back for joy in holiday marketing. The department store describes its holiday campaign as centering on “time with family and friends and sharing joy with others.” The ad will emphasize “the simple joys” of special moments with friends and family.

Last year, campaigns like these may not have been appropriate. But this year, Easwar says these types of holiday ads may be more prevalent as retailers try and remind shoppers of what things were like before the pandemic. 

“Remember those amazing things we used to do from, you know, forever until 2019? Let’s get that back this year,” Easwar said. “And I think that’s a slightly different message than you’ve generally seen in the past where it always felt like, ‘Here’s the exciting new thing.'” 

Is e-commerce ‘divorcing the experience’ from holiday gift buying?

Some of the excitement of the holidays may be returning this year, but with shoppers shifting more spending to e-commerce long term, is the fun of holiday shopping at risk of being lost? According to McKinsey, stores saw 5% growth in August, but e-commerce sales have continued to rise strongly, with 30% growth in the same period. Around 60% to 70% of shoppers buy or research both online and in stores, according to the survey, and online penetration is approximately 30% higher than pre-COVID. 

Alvarez & Marsal sees the interest in e-commerce as not necessarily threatening to stores, provided retailers invest in them. Like McKinsey, the firm found that omnichannel shopping was popular and physical stores “still reign supreme” during the actual purchase. Online channels were more useful prior to and after purchasing. 

As e-commerce rises, though, there’s the potential for a vicious cycle to hit retailers, according to Easwar. Retailers are creating systems for product delivery and other conveniences to address the popularity of e-commerce, which also means consumers don’t feel the need to visit stores as much. 

“So stocking the store makes less sense, which makes the value of going in store to explore products less valuable, which then pushes me online to shop, which then makes the store less valuable,” Easwar said. 

Offering e-commerce and easy pickup options like curbside are great for convenience, but they also in some ways “detract from that communal holiday experience,” according to Easwar. The result is that what used to be one experience – shopping for the holidays while enjoying the sights and sounds associated with the season – has become two: The task-oriented shopping for the season and the more experiential enjoyment of the holiday environment. 

“Now, I shop on my phone on maybe Thursday night while I’m just watching TV. And Saturday, I go to a holiday market where it’s not to come away with things but it’s to be in that space, drink a hot cocoa or a mulled wine, hang out with a couple friends, walk around, see the decorations and come home with nothing necessarily in a bag,” Easwar said. “It’s almost divorcing the experience from the goods and services you’re purchasing and getting those in different ways.”

The perpetual rise of e-commerce will only exacerbate that issue as customers turn to delivery and convenient pickup options instead of their usual store visits. But even with most projections including a rise in e commerce once again this year, Witcher thinks that the reverse will happen. 

“We want to feel like things are going back to normal, and the way we do that is to do things we did before the pandemic,” Witcher said. “We’re almost trying to will it to happen. By getting out, the virus is going to notice we’re getting out, and it’s going to give up, right?” 

Simultaneously, Witcher expects that as shoppers potentially step back into stores this fall and winter, retailers will likewise step back from offering services like curbside. He pointed to Costco, which should be “the poster child” for curbside, as a good example. After finally introducing a pilot of the service, the wholesaler discontinued it because it hadn’t gained much traction, according to executives. Witcher thinks this is because when shoppers enjoy a retailer’s experience, they’ll want to shop in the store, not pick up something curbside. 

“We don’t really need curbside. In most cases, if we leave the house that means we want to get out of the house and not sit in our cars,” Witcher said. It’s also more costly for retailers than having shoppers come into stores themselves. “I’m encouraged when I see curbside spots being the only open spots in a mall. I like that, and the reason I like that is because it shows that consumers are dedicated to shopping.” 

E-commerce and convenient fulfillment options were necessary during the height of the pandemic last year, but long term it may be a better sign for the “fun” of shopping if customers return to physical stores. The separation of gift buying from the experiential elements of the season does give customers the option to choose when they just want to buy products and when they want to have a more full holiday experience, Easwar said, but in terms of the overall season, that could be more harmful than helpful. 

“We should be able to say that a task can have some function and some entertainment together. That’s what living is, it’s not picking when you want to be productive and picking when you want to be entertained, it’s going out and doing things and experiencing a mix of entertainment and function together,” Easwar said. “And there’s a philosophical side of me that says that is actually preferable as a human experience than this more economically efficient, as you might think of it, experience that I think we’re starting to craft more of.” 

This article was written by Cara Salpini from Retail Dive and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

BOPIS eCommerce is the next wave in omnichannel marketing

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Buy online pickup in-store, also known as BOPIS, is an omnichannel eCommerce strategy whose name is pretty self-explanatory—consumers buy products online, and then pick up their purchased items in-store, offering previously unavailable speed and convenience. Continue reading “BOPIS eCommerce is the next wave in omnichannel marketing”