As CTO of Engage People Inc. Len Covello helps companies differentiate loyalty programs to deliver a better experience for their customers.
Deloitte’s annual back-to-school survey findings from July 2024 serve as a call to action for retailers this holiday season. Findings indicated that parents would prioritize value over brand or retailer loyalty when shopping for supplies. Sixty-seven percent of respondents indicated they’d shift brands if their preferred brand was too expensive.
While the Fed is beginning to lower interest rates, consumers remain concerned about inflation and other economic conditions. This means parents’ willingness to abandon brand loyalty in favor of better deals could carry over into the holiday season. The hunt for deals has been further validated by research from Blackhawk Network (BHN). According to the global branded payments provider’s annual holiday forecast, 45% of shoppers surveyed said they plan to change their shopping habits to focus on value and deals.
Before the shift away from brand loyalty becomes an ongoing trend, retailers should consider how to best leverage technology to ensure their holiday sales and promotions stand out and attract shoppers. This way, parents understand they don’t have to forgo loyalty in favor of better prices—they can have the best of both worlds if retailers play their cards right.
What role does technology play in ensuring promotions resonate ahead of the holidays? From loyalty programs to social media and emerging technologies like generative AI (GenAI), retailers have a host of tools to lean into this holiday shopping season and beyond.
Loyalty Programs And Spreading Holiday Cheer
According to a CreditCards.com survey, nearly a quarter of credit card holders didn’t redeem their rewards in the previous year. Referring to loyalty points, that’s backed currency sitting in digital wallets waiting to be spent. Luckily, the tide seems to be turning for 2024. BHN’s forecast states that Gen Z and millennial customers will lean into rewards for holiday shopping this year, with 43% planning to pay for holiday gifts with store or credit card points and 26% planning to purchase gifts using their loyalty points.
Bolstering loyalty programs and the way that points can be redeemed is one way retailers can ensure their customers find their way into their storefronts this holiday season. Buyers are looking for ways to trim costs, and with the ubiquity of points increasing, consumers who can supplement spending with loyalty points will receive instant gratification. It’s like offering “free currency” paired with lower prices at checkout. This alone can entice shoppers who may want to shop at their favorite stores but are looking elsewhere to find better deals.
One key factor to keep in mind is ease of redemption. By integrating loyalty points as a payment option at the point of sale both online and in-store, consumers won’t have to think twice about tapping their digital wallet to redeem or selecting the points balance option online.
Beyond offering ease and flexibility at check-out, loyalty programs can also offer retailers access to actionable data, which allows them to better target offers and promotions. Personalization goes a long way in fueling loyalty. However, privacy concerns are crucial, especially when dealing with loyalty programs and payment methods, so data security, compliance and customer trust-building are paramount.
Leveraging Tech To Amplify Promotions
Loyalty programs, particularly those that simplify redemption by accepting loyalty points as a ubiquitous form of currency, can serve as a solid foundation for keeping customers coming back this holiday season and beyond. Branching beyond this foundation, other strategies can be deployed to further amplify sales and promotional events.
Leveraging the power of social media is also a powerful tool. Take Amazon and Snapchat’s partnership as an example. The partnership allows customers to “shop Amazon’s Snapchat ads and check out with Amazon without leaving the social media platform.” This capability, called social shopping, is another way for retailers to meet customers where they are using modern technology.
Another way to maximize the power of social media is through user-generated content campaigns. This entails encouraging customers to share their product experiences through social platforms and serves as a more traditional and authentic avenue to foster community engagement and brand advocacy when compared to paying influencers.
Looking beyond social media, sometimes holiday campaigns need a creative boost. Generative AI tools such as Jasper and ChatGPT can be used to validate campaign promotions or help get marketers over a creative hump. Once a retailer has their concept defined for a promotional campaign, they can leverage GenAI to punch up the copy, generate a catchy headline or tagline, or offer additional ideas to maximize the campaign’s potential.
This is not to say GenAI should be used to generate campaign ideas from scratch, but it can be a powerful tool for brainstorming additional ideas to supplement what your team has already come up with. Other technology, such as augmented reality, can help give shoppers a preview of what items could look like inside their homes to solidify decisions.
Lastly, with promotional strategies in place, it’s important to optimize user experience. Seamless, omnichannel experiences are what customers are used to. A clunky experience could lead to abandonment, even if sales are enticing.
Conclusion
With more shoppers on the hunt for better deals, more retailers are revamping the way they leverage technology to promote their sales and offerings this holiday season. This can also help set organizations for longer-term retention once the holidays are over.
From the basics and best practices of loyalty programs—like a simple reminder that points can be used to supplement purchases—to leveraging social media and GenAI to deliver a more personalized message in engaging ways, a thoughtful approach to technology can be a gateway to success. The right combination of technologies and strategies offers retailers the opportunity to capture and gain emotional connections to fuel long-term loyalty.
Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
