Interviews, insight & analysis on digital media & marketing

Here comes Peak Season: the most disloyal time of the year

by Emma Sahota, Managing Director of Astound Commerce UK

In the current climate with all the indicators on economic uncertainty running red hot, it is worth pausing to consider that we are perhaps way beyond the conventional advice on how to have a great peak trading season. With brand switching rife and price sensitivity soaring, how can brands win loyalty from cost-of-living Christmas shoppers? 

Now is the moment to unleash the old cliché, ‘if you always do what you’ve always done, you’ll always get what you’ve always got’.  This approach tends to create only averages, which are unlikely to deliver either profit or higher market share during this year’s peak season, especially in the context of consumer spending being squeezed and brand switching on the rise.

Our recent 2023 Peak Preparedness report  asked respondents for a definitive list of loyalty drivers, in order of importance, that brands can act on now to improve their chances of success come peak trading. Unsurprisingly perhaps given the economic climate, offering low prices ranked number one for shoppers.  This was followed by:convenient shopping experiences, such as click and collect, free returns and one-click checkout, at number two; personalised and immersive shopping experiences ranked third; offer the highest-quality products/service as fourth; while publicly stating their stance on social issues.

Based on these varied demands, here then is a strategy for action.

Few brands will have the flexibility to act on #1 (offering low prices), unless they are in a position to buy market share through loss leaders, a strategy that has never been found to work for very long nor has proved to be sustainable due to the lost margin involved in acquiring shoppers through extensive and extended periods of discounting. So, we recommend focusing on those factors that reduce price sensitivity through a laser focus on promoting the perception of quality and giving great service, served up via flawless, curated and brand-rich digital experiences.

Take, for example, returns – no brand wants them but all the research shows that a clear and simple returns offer sustains loyalty, reduces returns long term and supports incremental spend.  The shoppers we polled identified including a returns label, offering access to a courier service pick-up to collect their return and allowing them to return the item and exchange it within the same process online as top ways retailers could make returns easiest.  This suggests that sometimes adding value to customers’ buying journeys can be about getting the basics right.

Service is also very much about providing personal, immersive shopping experiences, so that customers feel they are in a space online that belongs to them.  There is ample proof of this; McKinsey research shows that 71% of consumers expect companies to deliver personalised interactions. And the story doesn’t end there: 76 percent get frustrated when this doesn’t happen. The benefits are also borne out in figures; a 1-2% lift in total sales for grocery companies, higher for other retailers.  These kinds of programmes also work on marketing and sales investments of 10-20% less.

Winning loyalty has a direct relationship with how brands speak and act on sustainability, but we are now way beyond the early days of simply publishing commitments to the environment.  Sustainability must keep track of events and has become increasingly political, and therefore difficult to navigate.  However, in the research, consumers were happy to talk about what they expect, and in order of importance. The war in Ukraine, the environment/climate change, social justice issues, diversity/inclusion, civil/human rights issues, animal cruelty/unethical treatment.  There are also economic factors at play around sustainability.  In 2023, consumers are more cash constrained than in 2022, so they are slightly less likely to pay more for a sustainable product.

The offer that brands need to make to consumers all year round, but particularly during valuable peak season carries both a threat and an opportunity.  The threat arises from the complexity of having to manage so many elements, with the risk that the cost of service rises.  However, complexity is also an opportunity in that brands can build an offer that stands out from their competitors and adds so much value to the product catalogue.  Consumers are increasingly buying into experiences, and these can be built with several layers around immersion, personalisation, a narrative around good citizenship and a payment and returns service that is as far as possible frictionless.