We’re heading into June and though across the globe, small yet positive steps are being taken to beat Coronavirus, all around us we are hearing the phrase ‘the new normal’. But what does that look like when it comes to ecommerce and customer loyalty? Let’s take a look at the data from May and find out.
Over the past three months, we have been tracking four key things, using loyalty data taken from over 600 stores using LoyaltyLion:
You may remember that looking back at April, we brought you a relatively good news story – loyal customers continued to purchase steadily and remained more valuable than guest shoppers, and the chances of customers acting as advocates had increased significantly. The downside was that customers were no more likely to stop and spend time creating accounts than they were in March.
So what happened in May?
Having risen consistently across April, member orders saw a dip in May, They have however, remained steadily higher than they were in the last week of February before the initial impact of COVID-19 hit.
Program engagement has also seen a downturn in May. Having spiked at the end of April, both the number of points earned and the number of points redeemed fell notably in May. Figures do remain on average, 15% higher than they were in the last week of February or throughout March, suggesting that shoppers are still interacting with the brands they know and love.
However, given that guest orders have followed a very similar falling trend, it seems that consumer activity as a whole has slowed in the month of May. This could be a sign that people are becoming more used to their new way of life and have less need to continually purchase items to help them adapt. Yet it could also be attributed to the easing of lockdown in many geographies – with more chances to leave the house and interact with friends and family, there are fewer opportunities to sit and spend online.
With this in mind, it’s important that brands don’t sit back and allow customers to forget about them, but rather use this time to entice hard-earned customers back to purchase again. How do we recommend doing this?
Why is this more important than simply going out and trying to acquire more new customers? Well, despite order numbers falling, the average order value of a loyalty program member in May remained on average, 20% greater than the average order of a guest shopper.
Looking back at April’s data, we saw a significant increase in the number of program members leaving reviews and making referrals. Though the number of customers who are acting as advocates remains comfortably higher than it was at the end of February or throughout March, it has taken a downturn again. Fewer customers have taken the time to leave a review or make a referral in May, than in April.
As noted above, this could simply be because people are spending less time in front of their screens with new changes to lockdowns. However, while acquisition channel costs and effectiveness continue to fluctuate, brands should not miss the opportunity to turn the customers that shopped with them last month into advocates this month. What quick wins can you implement to drive advocacy post-purchase?
The story this month is not so different here, as we continue to see too big a gap between the number of guest checkouts and the number of accounts being created.
In April, we reported that although the number of new members signing up to loyalty programs had increased by 63% compared to the last week of February, the proportion of new customers becoming members had remained 2% lower.
In May, this remains consistent, with the number of customers creating accounts falling by around 30%, and the proportion of new customers becoming members remaining around 2% lower than it was at the end of February. While this is still an improvement on March data, it raises concerns about each store’s ability to maintain a long-term relationship with new customers.
Many stores have seen an influx of new shoppers as the Coronavirus situation has unfolded, and those customers could be a surefire way to secure a steady stream of sales over the coming months. However, it will be a lot harder to increase the value of those customers if they do not opt into further engagement. How do we recommend kick starting these relationships?
May’s data highlights some interesting trends and whilst these may be in line with the changing rules of lockdown, or simply a result of consumer behaviors adapting, the important thing is how ecommerce stores react to these trends.
What the numbers do show us is that as customers begin to venture out and about more, you may need to continue to work a little harder to keep connecting with them, and building valuable relationships longer-term. Our key takeaways this month are:
Stay tuned for another update at the end of June, and in the meantime if you have any questions or concerns about your retention strategy during this time, then we’re here to help!
Methodology:
In order to provide the most useful observation of the ongoing impact of Covid-19 on customer behaviors, this dataset features the same cohort of 634 stores being tracked across a timeframe which began on February 24th (week 0). This is a trend analysis comparing each week of March with the final week of February rather than a year-on-year comparison, using means with 5% of outliers excluded for each metric. All data has been converted to USD, using the March 1st 2020 exchange rate.
