Targeting Procrastinators Could Lead to Holiday Retail Wins
Analyzing more than $1.5 trillion in annual spend, purchase intelligence company Cardlytics’ data analysts found that physical stores still command more than 80% of holiday spending. But not all shoppers are created equal.
According to Cardlytics’ data, procrastinators could be the key to retailers’ success this holiday season.
That’s because consumers who leave their holiday shopping to the last minute are particularly heavy spenders. Shopping procrastinators also spend the most at brick-and-mortars’ online properties, compared to any other shopping segment. Appealing to these procrastinating consumers means extending store hours as well as offering inventory assurance tools and gift guides.
But Cardlytics CMO Dani Cushion cautions that capturing the procrastinator market isn’t, by itself, enough for brick-and-mortar retailers to make up for the declines in their share of holiday spending. Cardlytics data shows that brick-and-mortar retailers’ share of spend decreased nearly 2% between 2016 and 2017, although spend at those stores’ online and mobile properties is still on the rise.
“While procrastinators are an important segment for retailers to capture, they need to win spend from all shopper categories to enjoy a lucrative holiday season,” Cushion says. “As spending activity ramps up in the final weeks before Christmas, even customers that fall into the categories of ‘early birds’ or ‘Black Friday warriors’ will head in-store to make last-minute purchases, making this an especially critical time to win sales for those retailers that got a late start on their holiday marketing campaigns.”
Early birds, who spend before Black Friday, have become the most traditional shopper segment, spending 82% of their holiday budget in-store.
So-called “steady shoppers,” shoppers who spend consistently across the holiday season, are perhaps the most valuable segment for retailers. Steady shoppers comprise 40% of all holiday shoppers, and they spend the most money on average, ringing in $2,015 each.
“Retailers should engage this category of shoppers consistently throughout the season by offering rewards that drive repeat purchases, like progressive discounts that increase incentives each time a customer returns,” Cushion says.
Although brick-and-mortar stores are likely to see declining spend at their physical locations this holiday season, regardless of the shopper segments they target, Cushion expects those stores’ online and mobile channels to make up for some of the loss.
Looking at transactional data, Cardlytics found that while holiday spend at brick-and-mortar stores’ online properties peaked during Black Friday and Cyber Monday, sales at physical stores and pure-play online retailers didn’t register that same spike. Cushion says it will be interesting to see whether that trend continues in 2018 as retailers implement omnichannel marketing strategies.
Also intriguing is the declining significance of so-called holiday shopping events. Cardlytics found that 30% of all holiday sales occurred in the four weeks before Black Friday, and they ramped up again in the final weeks before Christmas.
Stephanie Miles is a senior editor at Street Fight.