Over 50% of customers say they won’t return to normal retail shopping behavior until the spread of Covid-19 begins to decrease. And long-term, most industry analysts agree Covid-19 will change retail industry trends and consumer behavior long after the immediate crisis has passed. Deep discounts and promo coupons are not likely to reverse that trend.
The cold fact is if you thought it was hard to get “new” customers in your store before, that job just got exponentially tougher. What’s the solution? Reward your best, most loyal customers with immediately-redeemable incentives to encourage return spending.
Deep Discounting Won’t Cut It
Even in this new era of online purchases, roughly 90% of retail sales are still made in brick and mortar stores.
Neil Saunders Managing Director of GlobalData Retail says, “Retailers are just doing whatever they can to survive. You can discount in a weak-demand environment, but it won’t matter.” Worse, deep discounting damages your perceived brand value and erodes profit margins instead of promoting profitability when you need it most.
Retailers that embrace new marketing approaches to engage with their customers are the ones who will survive this rough patch and flourish in the new business environment. Digital customer information is critical going forward. And “time-to-money” is the most important business metric in a rapidly changing shopping climate.
Instantly-redeemable customer rewards to motivate return customer spending is one of the fastest and easiest ways for retailers to improve their “time-to-money” metic. Before Covid-19, it was estimated it cost 5-7x more to sell to a new customer than an existing one, and returning customers spent 67% more. But you can throw those statistics out the window as obsolete post Covid-19.
Bringing back loyal customers with easily understood, instantly-redeemable rewards for return spending is the surest way for retailers to prosper in the coming months and years.