How Loyal Are Holiday Gift Givers? - eMarketer
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How Loyal Are Holiday Gift Givers?

Six in 10 US shoppers planned to cash in points for presents

December 23, 2014

Companies like Kohl’s and Bloomingdale’s—along with Sears, Kmart and CVS, among many others—hope that their generous loyalty programs will pay off this holiday season. In loyalty programs where customers accrue points over the course of the year and receive cash back, or a discount toward a future purchase, for their continued allegiance, retailers bet that customers will feel an affinity toward that brand and choose that store over a competitor each and every time. This strategy would pay the largest dividends over the holidays. With the early results of the season in, do loyalty programs work for holiday gifts?

Research by COLLOQUY, a loyalty intelligence provider, found that about 60% of US shoppers planned to use the points they’d been earning in customer loyalty programs to buy gifts this holiday season. The survey found that this year, consumers were willing to play a long game with their favorite retailers, investing dollars early in the year to receive top-notch promotions by year-end.

When US internet users are looking for loyalty programs, what they want most of all is discounts (79%), according to data released in June 2014 by Bond Brand Loyalty. Cash back (71%) and rebates (70%), along with earning and maintaining status (on an airline, for example), cited by 62% and 57%, respectively, also ranked high among important loyalty benefits.

One in 10 shoppers in the COLLOQUY study said that soft benefits like early access to a product or event would also be a strong incentive to patronize a specific store over a competitor.

Despite the assumption that millennials aren’t loyal—that they’ll go to whichever store offers the best prices and the biggest perks, regardless of whether they’ve shopped there before—millennials are flocking to loyalty programs. COLLOQUY found that 63% of younger millennials (ages 18 to 24) planned to use loyalty points they’d accrued on gift buying this year, a 43% increase over last year. That number jumped among older millennials; 71% of those ages 25 to 34 intended to cash in their loyalty points for gifts, up 34% compared with 2013.

Shoppers making use of loyalty programs planned to be strategic, waiting for double- or triple-point days to purchase gifts to maximize the points they earned (35%). And one in five shoppers reported adjusting gift ideas based on which products offered significant discounts or bonus rewards.

For shoppers, what’s important about loyalty programs isn’t only the discounts they offer. Once enrolled, shoppers experience a higher degree of personalization. Coupons tied to specific items specific customers want—served at the right time in the right place to the right shopper—close deals. And customers who sign up with loyalty programs cede more personal information to retailers, helping forge a path to shared affinity—and to repeat purchasing.

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