Merchant Warehouse Back to School Survey | Findings - Business

Merchant Warehouse |

July 7, 2014

Merchant Warehouse Back to School Survey

Surveyed over 100 small businesses who owned or managed an SMB. All retailers sold “back-to-school” items.

Definition of a loyalty campaign: A promotion intended to incentivize repeat/regular customers.

 

THE STORY 

Even though 58 percent of retailers agree loyalty campaigns can have a positive impact on their back-to-school shopping season, only 34 percent plan to run a loyalty campaign this back-to-school shopping season.

 

Where does technology fit in?

While there are a variety of reasons retailers are not planning to run loyalty campaigns this back-to-school shopping season, the most commonly reported reason was that loyalty campaigns have not been beneficial to the business in the past, with 25 percent selecting this response. This suggests that loyalty campaigns work better for certain types of businesses than others. Surprisingly, technology is not holding most retailers back from running loyalty campaigns this back-to-school shopping season, with only 18 percent stating they will not run a loyalty campaign because their business lacks the technology needed, and only 13 percent stating that the technology needed to run loyalty campaigns is too complicated.

 

Is consumer data a missed opportunity?

The businesses planning to run loyalty campaigns this back-to-school shopping season are making use of technology to run campaigns and track consumer data. In fact, only 12 percent of retailers will use paper punch cards, likely because paper punch cards don’t track consumer data or ROI. Email, a more data-friendly method, will be used by 56 percent of retailers to incentivize loyalty this back-to-school shopping season. Retailers running back-to-school campaigns will do so with targeting, with 65 percent of retailers running back-to-school campaigns using purchase data or demographic information to target customers likely interested in purchasing back-to-school items.

 

Are mobile apps the best way to implement a campaign?

Cost and lack of experience may be holding retailers back from running loyalty campaigns via mobile apps. Of the retailers planning to run a loyalty campaign this back-to-school shopping season, only 24 percent plan to do so via mobile app. But, when asked if they’d run a campaign via mobile app if they put aside cost or experience concerns, 56 percent said they would consider doing so.

As it turns out, consumers aren’t as eager to redeem promotions with a mobile app as merchants might think, with mobile apps being one of consumers’ least preferred methods of redeeming a promotion. Instead, more retailers should consider implementing loyalty campaigns via plastic loyalty/reward card. Only 35 percent of retailers plan to do so, but consumers ranked plastic loyalty/reward cards as the most preferred method of redeeming promotions or rewards.

 

FINDINGS

 

FINDING 1: Most retailers believe loyalty campaigns would benefit their business during the back-to-school shopping season, with 58 percent agreeing that loyalty campaigns would have a positive impact on their business this back-to-school shopping season.

FINDING 2: Back-to-school is a missed loyalty opportunity for retailers. Only 34 percent of retailers will run a loyalty campaign targeted at back-to-school shoppers this year, a four percent increase from last year.

FINDING 3: Retailers who ran back-to-school loyalty campaigns last year had positive experiences. 97 percent of retailers who ran a back-to-school loyalty campaign last year will run one again this year.

FINDING 4: Back-to-school is a missed loyalty opportunity for book stores. Only 15 percent of book stores surveyed plan to run a loyalty campaign targeted at back-to-school shoppers this year.

FINDING 5: Retailers not planning to run a loyalty campaign this back-to-school shopping season are holding back for a variety of reasons, the most common reason being that loyalty programs haven’t been beneficial to their business in the past.

FINDING 6: Technology is not a major factor holding most retailers back from running loyalty campaigns this back-to-school shopping season, with only 18 percent stating they will not run a loyalty campaign because their business lacks the technology needed, and only 13 percent stating that the technology needed to run loyalty campaigns is too complicated.

FINDING 7: Most retailers plan to execute loyalty campaigns over email this back-to-school shopping season, with 56 percent of respondents selecting to execute their back-to-school campaign over email.

FINDING 8: A variety of challenges are holding retailers back from executing back-to-school loyalty campaigns via mobile app and social media, with 56 percent of retailers planning to run a loyalty campaign saying that, challenges aside, they’d execute a campaign via mobile app, and 65 percent stating they’d execute a campaign via social media, putting aside cost, experience and other concerns. 

FINDING 9: Retailers see the benefit of using customer data for targeted campaigns. Of the retailers running loyalty campaigns this back-to-school shopping season, 65 percent will use customer data, such as purchase data or demographic information, to run campaigns targeted at customers likely to be interested in purchasing back-to-school items.

FINDING 10: Back-to-school campaigns are used to breed loyalty in advance of holiday shopping. Of the businesses running loyalty campaigns this back-to-school shopping season, 62 percent are doing so with the intention of building loyalty with customers in advance of the holiday shopping season.