Interest rates are going up because, in part, we’re borrowing more. Instead of saving we’re spending it up, big time. With annual consumer debt at a whopping £204bn, naturally retailers are worried about what’s going to happen to the inside of their purses come Christmas time if consumers suddenly realise they’re a little bit broke and won’t be spending as much1. But it seems no one’s been worrying about the consumer and in fact, by and large, we’re in this mess because retailers, banks, the automotive industry et al keep giving us credit we can’t afford to pay back. And worse, presenting us with ‘must spend buy’ opportunities like Black Friday so we all end up look like lemmings falling into a credit abyss.
Here we are though, consumer confidence really is waning, and we’re up to our necks in debt. But in light of the current political and economic uncertainty of Brexit, it’s critical that we don’t stop spending altogether. So how should brands traverse these unsteady plains?
To me it seems the bigger the brand, the bigger the corporate responsibility to balance the consumer wants, and needs, with their own bottom line. Instead of creating a retail melee and encouraging us to spend (not) our money in a small, apparently frenetic window of time called Black Friday, brands should be adopting a more levelled strategy to acquiring customers. And at the very core to this strategy, they need to focus on loyalty; how to get it and how to keep it.
In a world where our brand relationships have been made fickle and subject to change thanks to the internet and technology - “66% of consumers say they’d have a more positive opinion of a loyalty programme if it was available on their smartphone or in a mobile wallet app”2 - retailers need to think differently about consumer brand loyalty and revenue driving programmes. Throwing a few deals into the mix on Black Friday might see a temporary boost to profits but the reality is that’s probably the only time they’ll have share wallet of most consumers.
For me, Black Friday has lost the little appeal it ever had. I’m too time-poor to get ahead with my Christmas shopping and I feel like I’d just be buying something for the sake of buying it. And honestly, if I wanted something so badly, I’d have sniffed out a deal some other time, in my own time. There’s also the pressure to sign up to a brand I don’t have a relationship with and sharing data isn’t something consumers are generally happy to do, unless of course there’s a value exchange. Yes we’re buying from you, but what else can you give me? It’s a bit one-sided but that’s the truth of it.
Brands need to offer more than just the commodity they’re selling to ensure we purchase with them. I want pre-sale intel, access to competitions where I might actually win something, product education info etc. etc. They should be looking further down the road when interest rates aren’t first page news and consumer confidence has recovered to ensure that when we’re back dropping coin, we’re dropping it with them. And not just on one day, but throughout the year. But you need a solid loyalty strategy for that. A strategy that acknowledges that every interaction a customer has with the brand has to be one that delivers relevance – be that offers, products or education – back to them. Relevance is key and if you’re not relevant, customers will spend with you once and move on. In fact, 18% of respondents to an Accenture survey, “reported that their own expectations about brand loyalty have changed” and “that more than half (54 percent) of US consumers have switched a provider in the past year.3
But, there is share of wallet to be had in ‘the retail event of the year’, so alongside more durable loyalty strategies, brands that want to, should use the period to acquire as much individual and interest rich data as they can. Understanding what they’ve sold to who will enable them to re-start the conversation post Black Friday; from reviews, to offers, to complimentary products, the opportunities to re-engage and retain the customer are vast.
For the brands that already have established relationships with their customers, perhaps it’s time to adopt an ‘always on’ Black Friday. Brands that have useable data should be tailoring their deals and communication for their customers and offering them consistently based on perceived need. They should be running me my very own, personalised ‘Black Friday’ throughout the year. Modern loyalty should be about understanding me and my needs and presenting solutions whenever they’re seemingly required. It feels vacuous, short-sighted, and frankly a bit dated, to sit on the bandwagon of the masses getting the consumer to buy and engage with a brand on one day.
Larissa English-Rees, Senior Account Director, RAPP UK
3. Of 25,000 consumers. https://www.inc.com/peter-roesler/how-to-build-brand-loyalty-in-customers-in-2017.html