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The fourth quarter of 2020 will be different in many ways, yet it will still carry outsized importance for retailers. Shopping behavior has been heavily disrupted. Here’s what pandemic lessons you can apply this holiday season, and why you should focus on millennials over Gen Z.
Millennials are more committed to online shopping than Gen Z
As it might be expected, Braze’s research shows baby boomers are most eager to return to “real” stores—only 18% plan to increase their online shopping post-pandemic—followed by Gen X (35%) and Gen Z (33%).
Almost half of millennials (44%) say they plan to do more online shopping in the future, even after restrictions and health concerns are over. After having a taste of how easy grocery delivery can be on mobile, for example, why would they go back to fighting for a spot in the supermarket parking lot?
Gen Z, primarily still at home, may feel less driven by time constraints and safety worries. This group is also more likely to miss the social aspect of in-store shopping with friends.
Younger shoppers are bullish on the holidays
Consumer confidence varies with age, too, and there is a stark divide when it comes to thinking about holiday spending this year. One in 10 people over 40 years old (13%) intend to increase year-end holiday spending in 2020. A good 33% of those under 40 years old, however, expect to spend more this holiday season compared with last year. Smart strategists will use modern marketing automation to test differentiated holiday messages and continuously optimize into those that perform best for each audience segment. Avoid defaulting to steep discounts, as seasonal online shopping is more than just looking for the lowest price.
Newly acquired consumers are more likely to move on than those who signed up pre-pandemic.
Unlike big-box stores and platforms, local retailers are likely to garner the lion’s share of millennials’ extra holiday spend. The pandemic has hit small retailers hard, and shopping small is a concrete way to help neighborhood stores survive the Covid-19 crisis. More than half of millennials in the US (51%) said they would be making almost all or most holiday purchases at small local businesses. That means stakes are higher for the major players, who will need to retool customer engagement strategies to give customers relevant reasons to shop with them.
To keep loyalty, reinforce
Users acquired through mobile channels are more valuable than those who come in through other avenues during the pandemic. Remarkably, mobile-acquired customers are 10 times more likely to convert with a purchase, and 12 times more likely to make a second purchase. That said, don’t assume that once you’ve got them, those mobile shoppers are yours to keep. Newly-acquired consumers are more likely to move on than those who signed up pre-pandemic.
The data shows that 87% of U.S. consumers are planning to continue to shop online as much or more, even after brick-and-mortar retailers fully reopen. To improve retention, make sure marketing communications are useful, timely and personalized to be relevant to each new shopper. Well-crafted lifecycle marketing programs that onboard new customers with care will reinforce new habits early and strengthen acquired shoppers’ bonds with your brand.
Applying pandemic learning for holiday success
Consumers have demonstrated a willingness to try new things during these unusual times. The flip side, however, is that brand equity built up through pre-pandemic marketing may not pay off, as brand awareness does not equate to conversion during the pandemic. Only 13% of U.S. consumers cited “familiarity with the brand” as a top reason for making a purchase.
This holiday season each interaction with a customer presents an opportunity to strengthen the bond with the brand more than ever. Start work now to create seamless cross-channel messaging that demonstrates a contextual understanding of each customer in the moment. A relevant holiday experience is more likely to give the customer a reason to stay loyal into the new year.