Why retention was the winner of BFCM 2020, and what you can learn from the leading brands

This year, ecommerce boomed. Experts reported that the sector saw the equivalent of ten years’ growth in just three months due to swift digital adoption. The market swelled to a size that wasn’t expected for years yet

But what impact did all this growth have on the biggest event in the ecommerce calendar? 

This year, 58% of retailers felt more prepared for this year’s peak as a result of pandemic-spurred demand. 

And with cities under lockdown for months at a time, shoppers were more confident to go online for their bargains: ahead of the peak, 51% of consumers said they would be more likely to use Google (or a similar search engine) to shop during the sales.

Typically, the peak period sees brands think about acquisition, prioritizing all the new customers that can be brought in the door with a discount. However, ahead of Black Friday, we predicted that brands who focussed on their existing customers, rather than on acquiring new ones, would be the winners. Why? Because when surveyed before the event: 

  • 68% of shoppers said they preferred to return to the comfort of brands they knew and trusted in the first half of 2020
  • 52% of shoppers said that they would prioritize shopping with brands where they have points and rewards in their account over the peak
  • Only 25% of shoppers said they wouldn’t be opening brand-related emails over the BFCM weekend
  • 38% of shoppers said they would be likely to recommend brands and products to others during the sales period

When it rolled around, Black Friday sales hit $9 billion, an increase of 21.6% from 2019. And each minute Adobe estimated that consumers in the US spent $6.3 million. 

A year that was so unpredictable in many ways followed the usual trend when it came to the peak period. Shoppers headed online in their droves to bag bargains. But what was the story when it came to customer retention?

Loyalty programs took center stage

Contrary to popular belief, BFCM is not just about acquiring new customers. Stores who engage their existing customers see a greater ROI. Data from stores using LoyaltyLion showed that this BFCM, compared to an average weekend:

  • Member orders jumped 13% meaning existing loyalty program members returned and repeat purchased
  • Customers redeemed 48% more rewards and engaged with the loyalty programs they were a part of
  • Loyalty members referred 10% more shoppers
  • Existing customers welcomed communications from brands they know and love – loyalty program email open rates saw an increase of 18%
  • New shoppers were open to building relationships with brands, with merchants experiencing a 29% uplift in program sign-ups

Brands that focussed on retention would have also strengthened relationships with their existing customers. This promises a greater return on investment over time than an influx of new, discount-driven customers who you will have to work harder on to convert into loyal shoppers. 

To inspire your own retention strategies for the rest of the seasonal sales and into next year, we’ve compiled some of the best loyalty promotions we saw over the peak.

What lessons can I learn?

We’re excited to share examples from brands across ecommerce, who used four tactics to build customer loyalty and stand out from the competition during BFCM. They are:

  1. Serving up a VIP experience
  2. Bonuses and free gifts
  3. Re-engagement emails
  4. Charity and brand alignment

⭐️ Exclusivity and VIP treatment 

A loyalty program is about more than points and rewards, it’s about making customers feel special. Your program should offer a VIP experience that will drive customers to return and engage more. After all, 79% of customers will be loyal to a brand if they can unlock exclusive benefits. 

Over BFCM this year, brands that won served up exclusive experiences through their loyalty programs.

Both Astrid and Miyu and Skinnydip used the BFCM sales to show their most loyal customers they value them. They did this by giving their loyalty program members early access to their sales before anyone else.

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This approach was adopted by beauty and cosmetic brands too. Pacifica, Mirenesse, and Bath & Unwind all sent their program members emails ahead of the peak showing them they get early access to the sales. 

Beauty is a crowded space. By showing their most loved customers they’re special, these brands are making sure they don’t lose their brand fans to more attractive discounts elsewhere.

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🏅 Bonuses and free gifts

Over the peak, shoppers are motivated by discounts and money-off. But the short-term satisfaction of low prices means they won’t be motivated to return to you when your prices return to normal. 

To overcome this, some brands used the peak to reward their customers with more value through their loyalty program.

Cupshe motivated more first-time shoppers to become members of their program by offering a bonus of 500 points for creating an account. This translates into extra perks and more rewards down the road. 

Taylor and Stitch used loyalty promotions to encourage members to up their average order value (AOV) over the weekend. Shoppers were offered a bonus of $20 worth of Common Club credit if they spent $100 or more. 

Pacifica took a different tack. Instead of offering bonus points that translate into discounts, they gave BFCM shoppers a free gift. This motivated their existing customers to return to them over the peak as they know they would get more value for every shop.

👋 Re-engagement emails

It costs five times less to retain a customer than it does to acquire a new one. This number is even more extreme over the peak. Brands big and small invest their marketing dollars in acquisition and getting the word out about their sales.

But these new, seasonal customers don’t always stick around. They’re discount-driven and need convincing to become a loyal follower long term.

Bath & Unwind realized that focussing on their existing customers would be more profitable than trying to attract new customers who are less likely to make a second purchase.

To remind shoppers they were there, Bath & Unwind sent their loyalty program members reward available reminder emails ahead of the peak.

In these emails, they showed shoppers their points balance and what tier they’re in. By sending these ahead of the sales, the brand’s customers were reminded they had points in their account that they could spend on BFCM purchases. 

Find out more about the kinds of loyalty program emails you can send here

Beauty Cosmetics Bath Unwind

🍃 Charity and brand alignment 

Conscious consumerism isn’t new. Last year, 71% of 16-24-year-olds said they feel strongly about corporate social responsibility. And, 62% of consumers said they would join a loyalty program if they knew the rewards had a positive social impact on the causes they care about. But this year, it’s found a renewed significance. 

Over the peak this year, numerous brands used the rush in traffic to show shoppers (old and new) that they were aligned in more ways than one. 

To their loyalty program members, Lucy & Yak sent emails educating shoppers all about their #YakSchoolRun initiative. They told customers that they wanted to, “do Black Friday differently”. Instead of slashing prices, the brand pledged to donate 10% of all BFCM sales to charity. 

This approach united the Lucy & Yak community around a common cause. In the end, this will result in more shoppers returning to the brand over others in the new year. This is because they’ll know the store is all about helping others and will want in on that initiative all year long.

Similarly, Missoma and Edgard & Cooper used the spike in sales over the peak as a way to give back to the planet. For every order processed, both brands pledged to plant a tree. 

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Shopify also ran a similar initiative. Before the peak, the platform pledged to offset all carbon emissions from the delivery of every order placed on the platform. Over BFCM 2020, Shopify managed to offset nearly 62,000 tonnes of carbon emissions – the equivalent of the annual carbon captured and stored by 80,970 acres of North American forests.

Conclusion

Black Friday Cyber Monday could have gone one of two ways this year. Luckily the year-long ecommerce boom isn’t over yet. Consumers are still on the hunt for bargains and are still primed to shop online. 

This blog post has outlined some of the loyalty promotions brands using LoyaltyLion ran over the peak. But these campaigns can inspire your new year promotions too. 

To lay solid foundations for your brand in 2021, you need to quickly convince your seasonal shoppers to return to you in the new year. Our Crunch time guide outlines more ways to re-engage shoppers in the new year – get your copy here.

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About the author

Mollie Woolnough-Rai

Mollie is a Senior Content Marketing Executive at LoyaltyLion. After graduating from UCL in 2016, she has worked both in-house and at marketing agencies providing expertise in content for both B2B and B2C clients. At LoyaltyLion, Mollie manages our content, making sure our readers get the best quality resources about customer loyalty and retention.

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