Browse All Articles

Taking a look at 2022 consumer spend patterns

With inflation at an all-time high, have consumers shifted their food shopping behaviors? At CDLX, we have the purchase data to uncover the most relevant insights within grocery and beyond.

Traditional grocers are losing share of stomach in multiple directions (-3pts vs. 2019) – act fast to retain customers.

• Restaurant captured 42% of total ‘share of stomach’ in 2022, up 1.6% from 2019
• Warehouse retailers also ended the year on a good note. Their share of stomach increased from 12.5% in 2019 to 14.5% in ’22
• Interestingly, share of trips is flat for Big Box retailers, but they have lost ground in terms of total share of stomach
• With the exception of Warehouse, which has benefited most from the inflation surge, traditional grocery appears best positioned to recapture share of stomach

Shopping channel preference varies by subcategory, so an omni-channel strategy is imperative.

Online shopping at Big Box retailers is up: 6.5% of total share of stomach in 2022, up from 2.9% in 2019 with the addition of Walmart+ and Shipt to the category.

Conversely, in-store shopping is up within Warehouse, Traditional, and Discount grocery, with increases in both trip and wallet share YoY.

Consumer shopping behavior is more unpredictable than ever, but brands can rely on performance marketing to help drive sales.

Opportunity to reclaim share exists across all grocery categories. Cardlytics can help identify and convert those audiences on behalf of your brand – and we can prove it.

Sign up to receive the next issue of Squeaky Cart straight to your inbox before it hits our site.

The ongoing rise in the cost of living has altered the way Brits approached spending in the last 12 months – with the Christmas period providing a clear indicator of today’s state of play. Spending year-on-year flatlined with the average transaction value sitting at around £33 for Christmas 2022 and the previous year.

Retail spending increased by less than 0.5% year-on-year in the last 11 days of 2022 –reaching nearly £442m, up £2m on 2021.

With Christmas being such a critical moment for retailers this flatline comes as a disappointment as the sector continues to shoulder the impacts of higher inflation and declining discretionary spend amongst shoppers.

That said, the Boxing Day sales provided a much-needed boost for retailers following adulled ‘Golden Quarter’. The average amount spent daily by consumers rose 18% betweenChristmas Day and New Year’s Eve last year, compared to immediate build-up to Christmas(21st -24th December 2022), with shoppers taking advantage of discounts as the cost of living continues to squeeze households.

Electricals, online fast fashion and marketplaces sales fall

Consumer spend on electricals saw a second-year of decline, as consumers reigned in their spending on big ticket items like devices, televisions and games consoles. UK electricals purchases have dropped by 20% over the last two years.

Online fast fashion retailers also experienced a slump in sales, with spend falling 42% from 2020 levels as consumers return to the high street for their wardrobe updates.

Digital marketplaces saw a 9% decline in spend year-on-year, following a period of growth between 2020 to 2021. And despite inflation hiking prices, buyers also appear to be turning away from previously loved furniture and other second-hand goods.

High street fashion, sports apparel and home improvements see gains

Despite an overall plateau in spend across the retail sector, spend in high street fashion stores, like Zara, H&M and Next, has risen 29% over the last two years – with consumers hitting the high streets to cash in on Christmas and Boxing Day deals.

Sporting goods brands - such as GymShark, Sports Direct, JD Sports - saw a 17% uptick in spend in the same two-year time period, with fitness-based new year’s resolutions fuelling prolonged sales growth.

Buyers have been turning to sales as a chance to invest in value homeware, with brands like IKEA, Dunelm and B&M recording a 12% increase on 2020 levels of spend.

While this is undoubtedly a difficult time for households - and bigger ticket purchases appear to have been put on the back-burner - consumers still want to cash in on potential deals, find ways to update their homes and wardrobes, whilst also doubling-down on their fitness goals in the new year.

As we go deeper into 2023, this is an opportunity for retailers to invest in building long-term customer engagement and loyalty. Through schemes such as rewards, discount ranges and personalised marketing, brands can deliver tailored savings and money back to their customer-base, at a time when it’s most valued. Unfortunately, the cost-of-living crisis isn’t going away anytime soon, so as belts continue to tighten, delivering savings through tailored rewards could be the difference that keeps customers engaged and onboard.

Sitting at the halfway point of the Golden Quarter, Black Friday is a crucial bellwether on consumer spending, indicating how retailers are performing and what they can expect over the critical festive period. This year saw Brits spend nearly £10 million less than in 2021 as rising inflation and the cost-of-living crisis tightened consumers’ belts.

A recent survey by Cardlytics found that over half of consumers (53%) plan to put fewer presents under the Christmas tree this year. At the same time, a similar number (46%) have said they have started shopping for presents earlier in order to spread the cost.

So, what effect did this have on Black Friday sales this year and what insight can this give us into the outlook for retailers this Golden Quarter?

Tighter budgets impact traditional Black Friday winners

Cardlytics spend data across 24 million UK bank accounts shows that total spend across key retail verticals this Black Friday weekend was £220 million – a reduction of 9% year on year. Black Friday itself saw a 6% dip in the number of transactions when compared with 2021.

Strikingly, the categories that took the biggest hit were those most often associated with Black Friday. Fashion and clothing saw some of the largest declines, with spend at fast fashion brands decreasing 30% year on year and the number of transactions declining by 31%.

It was a similar story for luxury brands which saw spend down 23% year on year and transactions dip by 17%.

Make-up and electrical goods, two sectors traditionally targeted in the sales, also saw weaker activity across Black Friday with spend falling 18% and 19% respectively.

Sales of less traditional Black Friday categories have fared somewhat better. Sporting goods were the standout stars this year seeing spend increasing by 2% compared to 2021 and transactions declining by 1%.

Learnings for Christmas

With people planning to spend less on festivities this year, and a weaker Black Friday than previous years, the Golden Quarter is likely to lose some of its shine for retailers. Consumer prices are continuing to increase and discretionary spend is on the decline, resulting in increased levels of caution around spending. Spend is shifting away from ‘aspirational’ items and gifting for Christmas to more practical, everyday purchases such as sporting goods.

We also know that consumers are looking for value from their shopping with nearly three in five (57%) planning to spend more time searching for deals for gifts. Retailers can tap into this by focusing on core product ranges that give customers value for money and by offering tailored discounts on the products they need the most – be it for gifts or when thinking about the January sales.

Are sales enough?

As Black Friday has shown, blanket discounts aren’t enough to get consumers through the door anymore. News stories have pointed to Black Friday discounts being less significant than they appear, resulting in a seemingly increased level of scepticism around such sales.  

As retailers look to Christmas and the frenzy of Boxing Day sales, this is an opportunity to take a more personalised approach to consumers – offering them tailored discounts on the brands and items that mean the most to them based on their shopping habits.

In times of financial challenge, helping people feel they have got a genuine deal on items that are worth buying has become more critical than ever and will help to build loyalty for brands in the long run.

Retailers have long been aware of the requirement for personalisation to drive sales and customer loyalty. As the cost of living crisis deepens, the need for this personal touch will only intensify – and those that can deliver on this, learning from Black Friday, will be the ones that build brand loyalty for the long-term, driving clear outcomes for the top and bottom lines.

ATLANTA, GA – January 23, 2023 - Cardlytics (NASDAQ: CDLX), an advertising platform in banks’ digital channels, today announced that Cardlytics’ Board of Directors granted 350,000 restricted stock units of Cardlytics to Amit Gupta, Cardlytics’ newly hired Chief Operating Officer. The foregoing restricted stock units were granted as a material inducement to employment with Cardlytics in accordance with Nasdaq Listing Rule 5635(c)(4) and were granted under the Cardlytics 2022 Inducement Plan (the “2022 Inducement Plan”). 50% of the restricted stock units shall vest on the first anniversary of the grant date and the remaining 50% of the restricted stock units shall vest quarterly over the following year, subject to Gupta’s continuous service with Cardlytics as of each respective vesting date. The restricted stock units are subject to the terms and conditions of the 2022 Inducement Plan.

About Cardlytics

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in Palo Alto, Los Angeles, New York, and London. Learn more at www.cardlytics.com.

Contacts:

Public Relations:

Robert Robinson

pr@cardlytics.com

Investor Relations:

Robert Robinson

ir@cardlytics.com

Headlines professing the challenging impact of the cost of living crisis on retail are everywhere at the moment. From sky high inflation, astronomic delivery and rent costs, to reports of dwindling consumer spending, the outlook is tough for retail.

Our new spending report found that four in five (79%) consumers are spending more on day-to-day outgoings than they did a year ago, with three quarters (72%) saying they plan to cut-back on non-essential spending this year as the cost-of-living continues to rise. 

But as consumers tighten their purse strings and re-prioritise spending, that doesn’t mean there aren’t opportunities that high street retailers can capitalise on. 

We’re already seeing spending patterns start to shift as budgets tighten, with more emphasis on more affordable little luxuries than bigger ticket items. 

But the real opportunity for high street brands is how they can capitalise on the fall in spending on luxury and designer brands. 

Spend on luxury and designer brands fell 7% in the first 6 months of 2022 compared with 2021, while the number of transactions at luxury brands dropped 10% in the same period. This proves that consumers aren’t just spending less on designer and luxury goods, but are turning away from these brands altogether.

This downward trend looks set to continue into next year, with over half (59%) of consumers planning to spend less on luxury goods this year, while a further half (48%) plan on switching to cheaper brands for clothing and homeware as the cost-of-living bites.

This is the big opportunity for the high street. When recessions hit, consumer desire to purchase and treat themselves doesn’t go away, it simply changes shape. As shoppers choose to spend less and spend better, moving away from designers, the need to replace items or buy clothing won’t dissipate. The key for high street brands will be how they can capture this spend. 

Traditional high street retailers are already benefiting from the gap that luxury leaves, with both total spend and the number of transactions at high street fashion brands up 11% in the first six months of 2022 compared with 2021 as consumers ‘trade down’ when shopping.

As the cost-of-living crisis continues to bite, high street fashion brands should position themselves as a great value alternative for quality designer goods to encourage people to make the shift away from luxury shopping. 

To do that, serving luxury and designer shoppers relevant rewards and offers on the categories they shop the most can help divert spending.

Banking channels are an effective way to target these higher spending customers – targeting specific customers in the channels they already operate in with the brands they love to encourage switching and spending. 

This doesn’t mean that retailers must engage in a race to the bottom on price, keeping price lines reassuringly expensive for this shopper set can help make the switch more appealing. 

As shoppers prioritise their spending, and move away from luxury and designer purchases, high street brands that invest in this group now will expand their market share in the long run.

Download the UK State of Spend report here.

ATLANTA, GA – January 23, 2022 – Cardlytics (NASDAQ: CDLX), an advertising platform in banks’ digital channels, today announced the appointment of Amit Gupta as its Chief Operating Officer, reporting directly to Karim Temsamani, Chief Executive Officer.

Effective today, Gupta will lead Cardlytics’ overall operations, strategy, and business analytics, where he will closely align with sales, product, and engineering leadership to deliver an optimized platform that exceeds both advertiser and partner expectations. In addition, Gupta will serve as the general manager of Bridg, where Cardlytics can leverage his experience running and scaling businesses. Amit Jain, current CEO of Bridg, will work closely with Gupta as he transitions out of the business over the next several months.

“Cardlytics is delighted to have attracted such a thoughtful, experienced and operationally strong executive,” said Temsamani. “Amit and I worked together for several years at Stripe, where he always impressed me with his strategic and technical abilities. I look forward to resuming our partnership as we optimize and grow the potential of the Cardlytics business."

Gupta joins Cardlytics from Stripe where he was Head of Strategy and Operations for Global Partnerships, responsible for work with banks, networks, and payment methods. Before Stripe, Gupta was Director of Strategy, New Products, and Operations for Google’s Geo division, leading product and engineering execution and strategy for popular consumer and business products like Google Maps, Local Search, Food, Maps Enterprise Platform, and SMBs. Prior, Gupta founded and was the CEO of a series of startups. He started his career at Booz Allen Hamilton, where he was promoted to Partner in the Technology practice working with clients across media, financial services, and consumer products.

“I am extremely excited to join the Cardlytics team. My background in both advertising and financial technology gives me a unique perspective on Cardlytics’ current capabilities and future product offerings. The product roadmap ahead makes now the perfect time to focus on operational excellence by optimizing the efficiency of the core platform and unlocking the potential of the promising Bridg business. I’m looking forward to helping the team execute on our goals and harness the full power of the platform in such a pivotal moment,” said Gupta.

Gupta holds a Bachelor of Science, Electrical Engineering from The Ohio State University and a Master of Business Administration from the NYU Stern School of Business. He will be based in Cardlytics’ Palo Alto office.

About Cardlytics

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in Palo Alto, New York, Los Angeles, and London. Learn more at www.cardlytics.com.

Cautionary Language Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to future growth and delivery of an optimized platform. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," or variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control.

Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to the risks detailed in the “Risk Factors” section of our Form 10-Q filed with the Securities and Exchange Commission on November 1, 2022 and in subsequent periodic reports that we file with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Contacts:

Public Relations:

Robert Robinson

pr@cardlytics.com

Investor Relations:

Robert Robinson

ir@cardlytics.com

• Tighter budgets drive consumers to discounters, with spend at brands like TK Maxx, B&M and Home Bargains up 12% in the first half of this year, with transactions up 17%
• Average spend at second-hand marketplaces rises 482% between 2019 and 2022, as consumers search out second-hard bargains 
• Spend shifts from designer brands to the high street, as spend at high street brands rises 11% in 2022¹, while the number of transactions at luxury brands falls 10%

LONDON – 8th November 2022 – Cost-conscious consumers are switching to discount brands and second-hand marketplaces which saw double digit spending growth in the first half of the year, a new report from advertising platform Cardlytics finds. 

The State of Retail Spend report, based on the spending habits of over 24 million UK bank cards and the views of over 2,000 UK consumers, found that four in five (79%) consumers report spending more on day-to-day outgoings than they did a year ago, while with three quarters (72%) say they plan to cut-back on non-essential spending this year as the cost-of-living crunch sets in.  

Discount brands see boom in spend 

As costs increase and consumers look to make their money stretch further, the report found that over half (58%) of consumers plan to shop more at discount homeware and fashion brands this year.

Discount retailers such as B&M, TK Maxx, Home Bargains and Primark saw the largest increase in spend in the first half of this year, up 12% compared to 2021¹, whilst the number of transactions at these brands rose 17% in the same period.

Second-hand becomes mainstream 

The report also found that increasing numbers of consumers are turning to second-hand marketplaces in response to the cost-of-living squeeze.

Platforms like eBay, Depop and Vinted, saw a 7% uptick in spend in the first half of the year, compared to the same period in 2021, while the average number of transactions made on these platforms rose 6%.

It’s not just the number of purchases that are increasing, the amount spent per person has also risen drastically in recent years. In 2019, consumers spent £35.67 on average on second-hand marketplaces, compared with £207.63 in 2022 – a 482% rise.

That trend is set to continue as prices rise and consumers become increasingly aware of the environmental impact of buying new. The report found that one in three (34%) consumers plan to buy more second-hand items this year, while half (47%) of consumers say they plan to shop less at fast-fashion brands this year.

On the other hand, fast-fashion brands are starting to feel the impact of this mindset shift, with the number of transactions at these retailers down 16% in the first half of this year compared to 2021. 

Shoppers choose high street brands over designers 

Spend on luxury and designer brands fell 7% in the first 6 months of 2022, compared to 2021, while the number of transactions at luxury brands dropped 10% in the same period, indicating that consumers aren’t just spending less on designer and luxury goods, but are turning away from these brands altogether.

This downward trend looks set to continue into next year, with over half (59%) of consumers planning to spend less on luxury goods this year, while a further half (48%) plan on switching to cheaper brands for clothing and homeware as the cost-of-living bites.

Traditional high street retailers are already benefitting from the gap that luxury leaves, with both total spend and the number of transactions at high street fashion brands up 11% in the first six months of 2022, compared with 2021³ as consumers ‘trade down’ when shopping.

Home and garden spend dries up

The past two years saw bumper spend at home and gardens brands as lockdowns fuelled renovations, but withthree in five (61%) consumers planning to cut back on big-ticket purchases this year this upward trajectory may have reached its peak.  

The report found that consumers are still committed to improving their outdoor space, but they are increasingly looking to do so in ways that don’t break the bank. The number of transactions at garden centres rose 22% in the first 6 months of 2022, compared to the same period in 2021³, but the average transaction value fell 20%³, suggesting that consumers are continuing to shop at these brands but are spending less when they do. 

It's a similar picture for high street furniture brands who are increasingly feeling the impact of shifting consumer spending priorities. Spend at furniture brands fell 20% in the first six months of this year compared to the six months prior³.  

Dawn Reid VP Advertising Partnerships at Cardlytics said: “We know that even in times of economic downturn, consumers still want to find ways to treat themselves, refresh their wardrobes or invest in their homes. 

“But with tighter budgets than ever and the economic picture set to worsen, consumers are looking for cheaper swaps and ways to save, putting off big ticket purchases and trading down on many of their usual purchases.

“There's an opportunity for retailers to invest now, to support consumers longer term, whether through investing in price and discount ranges, value-focused marketing, or loyalty schemes, brands can put money back into their loyal customers wallets and help build longer term brand affinity. Those brands that can grow and retain their customer base now, when times are tough, will be most likely to succeed in future.”

Download the UK State of Spend report here.

About Cardlytics

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their rewards programs that promote customer loyalty and deepen relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in London, New York, Los Angeles, San Francisco, Austin, Detroit, and Visakhapatnam. Learn more at www.cardlytics.com.

Energy bills are at an all-time high. Mortgage rates are at the highest level for 14 years. Last week the cost of a weekly shop rose at its fastest rate since 1980. 

While we all wait for the outcome of the Government’s budget in November, there’s only one question on retailers and shoppers' lips: when will prices stop rising? 

As inflation keeps creeping up, it’s fundamentally altering what consumers buy and how they shop. Our latest research found that three quarters (72%) of shoppers plan to cut-back on non-essential spending this year as the rising cost-of-living sets in. 

But, heading into a recession doesn’t always mean spending disappears. More often than not, spending just changes shape. 

Our new spending report, based on the spending insight of one in four UK bank accounts, found that increasing numbers of shoppers are turning to second hand marketplaces in response to the cost-of-living squeeze, swapping new for second hand in a bid to bag a bargain. 

Platforms like eBay, Depop and Vinted saw a 7% uptick in spend in the first half of the year, compared with the same period in 2021¹, while the average number of transactions made on these platforms rose 6%.

Strikingly, this growth isn’t just coming from an increase in the number of people buying second hand – the average spend per person has also skyrocketed by 482% in the past three years, from £35.67 in 2019 to £207.63. No longer just a budget option, second hand fashion is increasingly the go-to for buying clothes. 

There’s no arguing that the cost-of-living crisis is accelerating a trend towards second hand shopping in search of better value. But the shift to second hand was already on the rise as the impact of the fashion industry on the planet was made all too evident.

Almost half (47%) of shoppers say they plan to shop less at fast-fashion brands this year, and we’re seeing this play out across our spend data; spend on online fast fashion brands was down 4% year on year in the first six months of 2022, while the number of transactions fell by 16%.

The cost-of-living crisis will undoubtedly make it more challenging for fashion retailers, as the competition for people’s dwindling disposable income gets tighter. Brands will need to work harder to keep and grow their customer spending and their market share.

Harnessing the shift towards sustainability provides an opportunity to do this. While focusing on sustainability as a retailer has a positive impact on the planet and brand reputation, it increasingly also comes with benefits to a business’s bottom line.

We’re already seeing some retailers take steps to introduce second hand or upcycled ranges, or even their own resale platforms, such as Zara’s newly launched pre-owned service or Urban Outfitters’ ‘Urban Renewal’ upcycled range. Even high street heavyweights like John Lewis are trialling their own fashion rental service.

Rewards programmes that encourage second hand purchases or recycling clothing are another way to capitalise – for example offering discounts on end of line goods, or vouchers or cashback for bringing in clothes to be recycled can help drive further spending. 

Done right, these moves can not only improve brand perceptions, but turn into lucrative revenue streams. 

The cost-of-living crisis and tighter budgets have converged with a desire to reduce overconsumption and shop more consciously and the trend is showing no signs of slowing. 

Fashion brands that act now to capitalise on consumer concerns for their purse strings and the planet will reap the rewards in the long run.

Download the UK State of Spend report here.

Loyal customers are your brand's biggest sales opportunity–spending an average of 67% more than comparable transient consumers.

A new era in consumerism is ushering in highly personalized service models and deep, lasting relationships with a loyal customer base. This shift towards relationship marketing emphasizes building a strong customer loyalty program to facilitate that relationship.

Key Takeaways:

• Personalized experiences create brand affinity and drive loyalty. 
• Strong relationships transcend temporary instabilities such as a recession.
• 52% of consumers choose brands based on loyalty programs

What is relationship marketing?

Relationship marketing is a long-term strategy that creates opportunities to nurture customer relationships. For many brands, repeat customers are willing to spend more and happy to keep coming back.

It's still just one piece of the marketing puzzle, but priorities are shifting. Instead a singular focus on new conversions, a relationship marketing strategy invests in retaining the customers that have already converted.

From a return on investment perspective, it's a logical approach.

A relationship marketing strategy might include:

• Obtaining and Listening to Customer Feedback
• Curating Personalized Experiences
• Enhancing Customer Service Delivery
• Establishing a Rewards Program
• Embracing an Omnichannel Approach

Why relationship marketing is important

Consumers increasingly demand deeper commitments from the brands they shop with. According to Salesforce, 73% of customers now value trust when choosing where to shop. Understanding relationship marketing and customer loyalty can help companies connect with their consumers.

Increased Sales Opportunities

Focusing on customer relationships can increase customer loyalty. This benefits the brand in several ways. First, customer acquisition costs go down while sales numbers likely go up. Loyal customers spend more–and more often.

Second, loyal customers stick around. In one survey, 75% of loyalty customers had been with a brand for over a decade. Imagine the purchasing power of an engaged customer over 10 years.

Generating Brand Awareness

Loyal customers are your strongest advocate. A deep-rooted part of our social human nature hinges on modeling behaviors. We're born with the instinct to mimic, look for examples, and adopt modeled behaviors from those around us. We’re also equally inclined to share or model for those around us. 

For brands, this means that happy, loyal customers are eager to share the good news. And interested prospects are willing to hear it turning loyal customers into a perfectly primed engine for boosting brand awareness.

Long-Term Stability

Strong relationships transcend temporary instabilities. A dip in the economy often leads to consumer pullback on spending. When buying resumes, purchase power is fair game. Brand loyalty is the tie that binds bringing familiar faces back to the brands they trust.

Relationship marketing drives loyalty and retention

If repeat business drives sales growth, the hidden potential in loyalty-driven retention is an opportunity many brands have not yet fully realized. As marketers lean into creating customer experiences and cultivating deeper engagement through emotional connection, both brands and consumers benefit from relationship marketing.

Consumers get a positive, personalized experience ripe with satisfaction. Brands see more sales, a better return on ad spend, and growing loyalty that continues to feed an efficient marketing cycle.

Relationship marketing strategies to increase customer loyalty

The key to increasing customer loyalty is in your approach to managing that relationship. Let's look at effective ways to make the most of your relationship marketing strategy.

Customer feedback

Obtaining customer feedback through surveys and using that data to inform business decisions like product development, marketing strategies, customer service models, and supplemental services provides a brand with the best chance of finding and fulfilling customer needs. 

On top of providing genuine solutions, customers feel satisfied when their needs are heard and addressed. Engaging a 360-degree customer feedback model grows brand affinity through deep satisfaction creating loyal customer relationships.

Personalized experiences

Nobody likes to feel like another face in a crowd. We're wired to belong but driven to stand out. As consumers, we want the accessibility of commercial products delivered with personalized service. 

Brands can use intel generated from quality first-party data streams to personalize customer experiences. Doing so creates a sense of familiarity that breeds trust while simultaneously addressing the ego and connecting with customers emotionally to build loyalty.

Great customer service

It sounds simple – deliver great service and win customer loyalty. The problem is that priorities shift, and balls get dropped. While most brands would like to believe they're providing great customer service, reality paints a different picture.

The majority of consumers base purchasing decisions on the level of service they receive. This means providing attentive service from knowledgeable, trained staff. This can increase customer loyalty better than offering a lower price.

Rewards programs

Consumers love incentives. Over half (52%) of consumers say that loyalty programs influence their decisions to shop with a particular brand¹.

A rewards program is a specific type of loyalty program. Rewards increase the perceived value from the customers' point of view, providing a strong anchor for maintaining loyal customers. It's a simple concept, reward your most loyal shoppers for every dollar spent with your brand, and they'll spend more. 

First-party data from Cardlytics can help brands identify loyal customers and customers at risk of leaving based on the share of spend in competitive categories. This data can then help brands personalize rewards based on unique customer relationships. 

Omnichannel approach

An omnichannel approach recognizes that customers engage in a variety of ways. The same consumers who shop in stores will also interact with the brand on social channels. Similarly, shoppers that gravitate toward in-app purchases might also be eager to leave reviews on aggregate sites.

Customers aren't siloed to independent channels, and your marketing strategy shouldn't be either. An omnichannel approach builds trust and loyalty by providing a cohesive brand experience across all touchpoints.

With an omnichannel approach fueled by Cardlytic's first-party data, brands can easily identify new or lapsed customers so that you can deliver personalized re-engagement offers through uniquely personalized messaging and offers.

How Cardlytics Helps Brands Grow Customer Loyalty With Strong Relationship Marketing

The untapped potential in your loyal customer base can be reached through effective relationship marketing. Cardlytics solutions can support a stronger loyalty program by providing unique insights on customer behavior, including the share of wallet spend across competitive brands. Your brand can use this information to provide personalized offers to engage and re-engage customers every step of the way.

Sources:

¹“Shopper Story 2020: The New Consumer Mindset,” Criteo, 2020