Modern Retail

From First-Time to Lifetime: How Personalised Strategies Transform One-Off Festive Buyers into Loyal Customers

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News reports about post-Christmas sales slumps are becoming as traditional as turkey and stuffing. Whether it’s gifts for the kids or the dogs, everyone has a reason to shop during the festive season and any resulting casualties show just how competitive the retail landscape really is. With new customer acquisition spiking in November and December as consumers often buy from brands they have not engaged with previously, retailers have an enormous opportunity to increase buyers’ loyalty and retention.

So how can retailers and brands continue to cash-in on this influx of new customers when the New Year’s parties have finished? Long gone are the days when slashing prices after January 1st was enough to bring shoppers back to the store. The modern online retail landscape now means consumers can pick up goods at sale prices all year round.

Rather than targeting consumers with tried and tested flash sales, a more tailored, personalised approach – such as analysing shopping behaviours and product interests and taking proactive action accordingly – can encourage second purchases that pave the way for long-term loyalty.

In this piece, we’ll explore not only what retailers can do to retain their first-time Christmas buyers but also how to convert them into lifetime customers.

Capitalising when it counts

When a consumer buys from a retailer for the first time, they hand over a treasure trove of information and insight throughout the purchase cycle. This insight is then only set to grow when shoppers make repeat visits and purchases. According to Bluecore’s 2019 Retail Email Benchmark Report, 25% of annual first-time purchases are set to be made during the Christmas sales spike (November and December), so retailers and brands are about to meet many new customers and receive a lot of valuable data. Even more importantly, there is a high proportion of consumers coming back for their second purchase within the four months following the spike.

Given the fact that second-time shoppers are known to be 130% more valuable than first-time shoppers, this makes the strategy behind any messaging and email campaigns vital for growing customer engagement and converting them on an ongoing basis. Rather than hoping shoppers will return, retailers should be proactive in using the data they have collected on seasonal first-time buyers to encourage those shoppers to make a second purchase as soon as possible. And the time to put those plans in place is now.

Robust personalised strategies

So what might those plans look like? Shoppers now seek a more tailored approach if they are going to engage with a retailer, meaning there is no room for sellers to rely on the old ways of communicating. While generic emails do serve a purpose at the top of the marketing funnel, they may have little impact in driving engagement and future purchases. Instead of clogging up inboxes with greetings and irrelevant promotions, marketers need to personalise their email strategies to capture their audiences’ attention and show they understand their needs at an almost intuitive level.

Yet, the question remains – what insight helps create meaningful email communications that lead to repeat purchases?

Bluecore has analysed over three billion emails sent by more than 400 retail brands over a 12-month period to understand how different types and degrees of personalisation influence customer acquisition, retention and other shopper behaviours. The research shows that retailers who see the biggest gains in customer acquisition and retention are the ones who make their email marketing campaigns more relevant by basing them on detailed data insight rather than simple segmentation. And when the revenue generated from personalised emails is 57% higher than that of static, one-time messages, it is too good an opportunity to ignore. For example, when Perry Ellis targets returning customers, the retailer uses each customer’s discount affinity to show them the appropriate offer necessary for them to convert. This individualised communication has produced a 2.4x conversion rate over non-personalised messages.

The value of customer loyalty

As evidenced by the spike in sales, many consumers are more than happy to spend their hard-earned cash over a festive season in which Black Friday, Cyber Monday and Christmas all offer temptations. However, that spike is short-lived and does not guarantee additional sales from those buyers for the remainder of the year. This puts the onus on retailers to keep shoppers engaged with relevant messaging to encourage that second purchase.

Retailers that are disproportionately focused on acquisition are often met with the rising cost of ad spend that affects their cost of acquisition, and without a strategic retention strategy, especially during this valuable time of year, they are leaving massive amounts of revenue on the table, leaving them out of pocket when the sales figures from January to March are revealed at the end of the financial year.

So, some questions retailers must ask themselves to thrive beyond the festive season are:

  • Who are my first-time buyers?
  • What is the most relevant product/offer/content for them to buy again?
  • Is all of this data accessible and actionable to me in order to respond to buyers quickly before they move on to my competitor?

By Mike Harris, International Vice President and General Manager at Bluecore.

Media Partner