Despite tightening budgets, Blackhawk’s 2022 Holiday Forecast¹ found that consumers plan to increase holiday spending this year. Consumers intend to keep buying, but are shifting their shopping habits in careful, creative ways to get more out of their holiday dollar and navigate rising costs this year.

According to Blackhawk’s research, just about half of surveyed consumers’ winter holiday shopping will happen between October and Black Friday/Cyber Monday. Shoppers started even earlier this year to spread out holiday purchases, monitor for promotions, find the best prices by shopping across different channels (e.g., in-store, online, in-app), and are increasingly turning to gift cards as go-to gifts that help stave off inflation and stick to a budget.

For retailers, that means it will be vital to have a solid cross-channel strategy to be able to meet consumer demands early and ensure plans span the entire length of the holiday shopping season. To better understand the retail landscape as we head into the critical 2022 holiday season, here’s a deeper look at the trends.

Consumers plan to keep spending, especially Gen Z

Generationally targeted marketing can help capture Gen Z spend, which will be key for retailers this year as the cohort will look to drive most spending increases. Surveyed shoppers overall are planning to spend more this holiday season with an 8% overall increase in gift spending this year¹, but this increase is largely driven by Gen Z. Significantly more than any other generation, Gen Z respondents plan to increase year-over-year gift spend by 28%.

Gift cards are the go-to gift

Gift card sales are expected to see an even greater lift, as surveyed consumers anticipate spending nearly half of their holiday budget on gift cards¹. Overall, shoppers surveyed expect to spend 18% more on gift cards this year compared to last year. Gen Z respondents are also driving this lift, with plans to increase gift card purchases by 57%.

Gift cards are a popular and economically resilient option because they give gift-givers the flexibility to load whatever funds fit their budget and are consistently the most requested gift year after year, according to the National Retail Federation. As retailers continue battling labor shortages with some even facing reduced store hours due to staffing, having gift card offerings front-and-center can help meet consumer demands and even prove to be a quick solve for shoppers that may have otherwise left empty-handed.

Digital channels are thriving

One of the biggest changes in consumer behavior brought in recent years is also likely to be the most permanent: everything about daily life has become a hybrid of online and in-person experiences. This includes shopping, delivery and payments. When it comes to sending holiday gifts this year, some 37% of shoppers² surveyed intend to send digital gift cards directly. Shoppers love the ease of being able to send near-instant gifts and being able to buy gifts at the last second. They will also be looking to shop across channels more than ever this year, likely as a tactic to find the best prices. Increasing digital gifting options and callouts to shoppers will help retailers not only meet consumers’ needs throughout the entire holiday season, but also capture their share of last-minute holiday shoppers.

Gift cards give gift-givers the flexibility to load whatever funds fit their budget and are consistently the most requested gift year after year.

Deals will deck the halls this year

Fifty-eight percent of Americans surveyed¹ report that they plan to change their shopping behavior this year and are especially interested in using discounts and promotions to offset rising costs. More than 40% of shoppers surveyed report using promotions and discounts more often for all purchases, but retailers are better off steering clear of discounts and focusing their offerings on reward-based promotions. Discounts are short-term, one-and-done solutions that may temporarily help turn over inventory, but don’t boost sales beyond the initial purchase. Reward-based promotions can outperform instant discounts by driving significantly more revenue and a greater return on marketing investment through ongoing customer relationships and engagement. Consumers benefit as well—regular, long-term brand touchpoints can help ensure they receive more targeted marketing opportunities, deals, rewards, and more for future purchases.

As consumers continue to adapt and navigate economic headwinds, these trends will be critical for retailers to continue to track and react to in order to keep up with consumer demands and expectations, both for holiday and into the future.

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Nov 2022

Inflation isn’t stifling holiday shopping, but it’s changing how, where, and when people are shopping

By Brett Narlinger, Head of Global Commerce, Blackhawk Network

Brett Narlinger is head of global commerce at Blackhawk Network, a global branded payments provider. He leads and drives growth across the organization’s physical and digital retail business globally.

COVER STORY

Jochen Heck

VP Sales - Retail

Colleen Baum

Partner

Amy Vener

Marketing Director

Mike Webster

SVP and GM

Karl Haller

Partner

Jill Standish

Sr. Managing Director

07/05/2024 16:45:35

Reimagining Personalization and Loyalty in Grocery Retail

By Shekar Raman, CEO and co-founder, Birdzi

Shekar Raman is the CEO, founder of Birdzi Inc, a B2B SaaS company, an industry pioneering Customer Intelligence Platform that helps Supermarket retail deliver a true one-to-one automated marketing & personalization at scale using AI/ML and other data-driven technologies.

Recently, consumers have been inundated with bad news. Prices for everyday goods are rising, supply chain disruptions continue to threaten product availability, and all before the holidays! These overwhelmed shoppers are going to devote their loyalty to the grocer that will make their life easier this holiday season.

By offering a personalized in-store journey, grocers can foster loyal customer relationships. Luckily, for grocers whose resources are already stretched thin, AI can help optimize personalization while minimizing or reducing resource requirements. This is done through strategic segmentation, automation and personalization. Let’s dig in.

Using Segmentation to Determine Personalization Methods

Segmentation is a common strategy used by retailers to simplify personalization by grouping shoppers based on past purchases and demographics. However, the nature of this segmentation detracts from true one-to-one personalization.

Grocers can instead determine personalization possibilities based on individual customers and their value to the company. For example, if a shopper is determined to have high spend, diverse categories shopped, and frequent visits, the grocer gains unique insights into the right personalization techniques for that customer. Similarly, if a shopper only occasionally visits the store and buys similar items each time, the grocer also learns valuable lessons.

These loyalty “scores” can be used to segment shoppers more effectively and determine the best personalization strategy automatically, with little to no manual intervention.

Letting Technology Do the Work

Using the loyalty “scores” detailed above, grocers can take personalization to the next level and create strategic promotions with ease. For shoppers who are already loyal, grocers can use their past behavior to deliver hyper-relevant deals that encourage them to grow their basket size and increase the frequency of their visits. If the shopper is an infrequent visitor, the grocer should focus on encouraging them to shop more frequently and across more categories. This can be done by offering deeper discounts across more touchpoints until they learn what works best for that individual shopper.

Creating truly personalized promotions will require a fundamental shift. These promotions should go beyond an occasional discount or a simple recommendation. Retailers no longer have to pull promotions from a fixed content library. They can, instead, create promotions using the entire store catalog for each individual shopper that are best suited to grow the shopper's loyalty. By flipping this equation and generating offers based on the customer’s behavior as opposed to using a preset list, promotions are more effective at improving sales and loyalty.

Luckily with artificial intelligence and machine learning, this can be done automatically based on customer data and preset rules – saving grocers valuable resources while improving the bottom line.

While retailers can’t stop inflation, it’s possible to recession-proof our businesses by improving profitability and solving for operational inefficiencies. Embracing a data-driven strategy will be critical for responding to conditions in real time.

Individual Personalization Creates Overarching Results

After implementing true one-to-one personalization, grocers witness great results. By targeting strategies based on the shopper’s level of involvement with the store, retailers have seen strong upward migration across loyalty levels and improvements in promotion redemption rates.

When monitoring the success of these campaigns, retailers should review results for changes in basket size, visit frequency, breadth of categories shopped and overall spend.

Changing the Game with Personalization

Personalization can make the difference between a grocer that has a loyal customer base and one that doesn’t. As extenuating factors continue to complicate the consumer’s shopping experience, grocers should rely on personalization to take control of their customer relationships and safeguard profits.

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COVER STORY

Fiona Swerdlow

VP, Research Director

Holden Bale

Global Head of Commerce

Huge

Tom Niedbalski

VP - Gift Solutions

Melissa Tatoris

VP of Retail

Afshin Yazdian

President

Francois Chaubard

Founder & CEO

NOVember 2022

NOV 2022

07/05/2024 16:45:35

Reining in holiday shopping with ‘in the moment’ personalization

By Tim Mason, CEO, Eagle Eye

Tim Mason, Chief Executive Officer
 

Tim has over 30 years of experience in the grocery and retail industries and a strong background in strategic marketing and customer loyalty. Previously Tim was a managing director at Sun Capital Partners and is currently a Non-executive Director at Gousto. Before that, he was Deputy CEO at Tesco from January 2010 to December 2012.

He held several other roles within the Tesco Group, including CMO for Tesco and CEO of Fresh & Easy LLC. While at Tesco, Tim was instrumental in creating Clubcard, Express, Personal Finance and Tesco.com. Tim published a book, “Omnichannel Retail – How to build winning stores in a digital world,” which was shortlisted in the Business Book Awards 2020. 

It seems the holiday shopping season starts earlier and becomes more unpredictable every year.

A recent McKinsey Consumer Pulse Survey found that 56% of consumers this year began shopping in October, while other 2022 surveys have found that many consumers started their holiday shopping much earlier (in September).

The shift to earlier shopping isn't the only consumer behavior-related challenge facing brands and retailers this holiday season. Sales periods have ballooned; for example, there are now multiple Amazon Prime “Days” spread throughout the year, and Cyber Monday takes place over weeks, not a single day. New modes of shopping are also becoming more popular, like last-minute delivery through a service like GoPuff or buying through a TikTok streaming event. The traditional holiday retail calendar and playbook are less reliable guides for retailers and brands every year.

Imagine if they didn’t have to deal with all that unpredictability and just met shoppers in the moment?

Advancements in data analytics and personalization capabilities have enabled retailers of all kinds, whether they are regional grocers or national mass merchants, to move towards meeting consumers “in the moment” when they’re actively looking to engage with content or shop items.

Using a new approach to personalization called Marketing in the Moment, retailers can deliver one-to-one messages to consumers based on their shopping history and a whole host of contextual data points, including seasonal factors. Those can include how a person likes to shop and in what channel to enable effective targeting of shoppers in prime moments throughout the holiday season and beyond.

It doesn’t matter if it’s September 4 or December 22 or online or in-store; in-the-moment marketing finds shoppers when it matters most to them. And there are countless moments to explore, each personalized to a unique shopper.

Getting into the holiday moment

The concept of Marketing in the Moment relies on the blending of shopper data, such as purchase history and loyalty card data, demographic input, and behavioral and environmental factors to contextualize offers and content that will appeal to a shopper at the specific moment they’re in at that time.

Previously, a retailer may have identified a group of consumers with similar shopping histories and traits and constructed a blanket holiday message with a blanket promotional offer that feels personalized. But the retailer is essentially crafting the same offer and the same content to be delivered to every consumer at the same time and on the same day.

During the holidays, even among a group of customers who on the face of it, look similar, there will be huge differences in how they shop, when they’re most likely to engage with a retailer and the context in which they all live will be totally unique to them. All of these reasons significantly impact how they should be communicated with and with what content. With a Marketing in the Moment approach, retailers can deliver truly personalized content which resonates.

Here are a few examples:

A regional grocer can personalize content to a Gen Z male shopper using location data to see that he is in the wine aisle inside a store; additionally, the grocer can factor in that it is early evening on a Saturday, look at his purchase history for the varietal of wine he likes, and deliver a personalized message to his mobile phone, notifying him of a $2-off coupon for a recommended bottle of pinot noir. The grocer can add a message that says it’s the perfect bottle to bring to a dinner party and refine the content to perfectly capture the moment he’s in.

Similarly, working with that red wine manufacturer, a regional grocer can personalize content to a mature female shopper, knowing she is shopping from home earlier in the day. The grocer can send an email to add a gluten-free red wine to the online cart, knowing her dietary restrictions, and alert her to add the bottle even though her order is in process. The message can spur an impulse purchase that adds to the value of the online shopping cart.

For retailers, there are many holiday moments to uncover. Maybe it’s a moment personalized around finding a gift before it goes out of stock? Or perhaps it’s another message for last-minute dinner rolls to round out a party. To find these moments, the critical (data) keys all lie within the context.

It doesn’t matter if it’s September 4 or December 22 or online or in-store; in-the-moment marketing finds shoppers when it matters most to them.

Marketing in the Moment model can level the playing field through data

Getting into context

To execute a Marketing in the Moment strategy, retailers can combine access to customer data with learnings from key contextual triggers such as:

Environmental cues — looking at weather like a snowfall, local events like a holiday festival occurring, seasonal goods, and more.
Location — considering where the shopper is physically (at home, in the store, moving down an aisle, riding public transportation, etc.).
Activity — knowing what the shopper is doing, perhaps viewing a mobile app, shopping online, preparing a shopping list of gifts, etc.
System triggers — accounting for a shopper’s loyalty program activity, social media engagement with the retailer, chatbot use, and so on.

Of course, Marketing in the Moment can be used year-round to personally reach shoppers. But there is no time like the holidays. The holiday season is ripe for retailers to replace impersonal messaging with relevant promotional offers and content that can ease some of the shopping stress during a hectic and challenging unique time.

And for consumers? Marketing in the Moment is a welcomed season’s greetings, helping them find gifts or plan parties. For retailers, it’s also another way to grow sales, control stock levels, and bring stability to a pivotal holiday shopping season ahead of whatever 2023 may bring.