Tech Guest Viewpoint: Is Q1 your biggest holiday opportunity?
As many of us grasp at the last moments of summer, those in the retail industry have one eye on the end of the year -- the time between November and December. It makes sense: holiday shoppers spent over $616 billion dollars just last year between Black Friday and Christmas. And while the ample time and resources spent on these two annual marketing priorities is certainly deserved, it is easy to put all of our eggs in this basket, accidentally neglecting the major retailing opportunity just around the corner -- the first quarter.
After all, experts estimate Q1 sales are not far behind the dollars spent at the end of the year. With gift card redemptions, new year sales, and returns or exchanges of less-loved holiday gifts, January is one of the biggest drivers of in-store traffic. With this boost in consumer visits, it’s important that you have a plan to convert traffic into sales, and new customers into brand loyalists.
Read on for tactics to leverage consumer attention in the first quarter for longer-term gain.
Boost gift card redemptions
One of the best opportunities to drive January sales is to encourage consumers who received a gift card during the holiday season to spend it. For consumers, gift cards represent "free money" which can be used for an impulse purchase or to fulfill an unmet need. For retailers, one of the best benefits of gift cards is that most consumers spend more on a purchase than the value of the gift card, delivering even more revenue. However, the challenge for many retailers is to ensure that the gift card is cashed in quickly, as it’s easy for a gift card to be lost or forgotten for the rest of the year, and become a brand’s missed opportunity.
Instead, implement measures into your gift card strategy that guarantee redemption in January. One option is to offer an additional discount or specialized coupon for purchases made using a gift card in the first month of the year. Alternatively, take a page from L.L. Bean’s playbook. Shoppers who made a purchase of over $50 by December 24 received a $10 gift card in return, which had to be used by mid-February.
This strategy expanded the number of consumers with LL Bean gift cards by rewarding gift card purchasers with a $10 gift card. It also created a spend urgency by attaching a redemption expiration date to the bonus $10 gift card.
Encourage ratings and reviews
Statistics show that 92% of consumers buy in to recommendations from friends and family above any other form of advertising. Because holiday is the biggest sales season, the time period right after holiday is the biggest opportunity for ratings and reviews given the influx of purchases made and gifts received.
Many of the most successful retailers have this capability and invest heavily into its success. Not only does customer feedback allow you to carry over December sales momentum into January, it positions your brand as a broker to whom consumers can turn for trusted advice. Prioritize collecting feedback on gifts received during the holiday season. To do this, pair a unique code on the buyer’s receipt or the recipient’s gift receipt, encouraging a rating or review for a chance to win an exciting prize. Not only will this spark feedback, but it will bring shoppers back for more.
Generate long-term loyalty
In the first quarter, gift returns or exchanges and gift card redemptions bring many new customers in-store, offering an opportunity to turn what would be a one-time purchase into a longer relationship. When consumers are redeeming gift cards or exchanging gifts, have in-store employees encourage registration into your brand’s loyalty program or mobile/email CRM program.
If your company doesn't have an established loyalty program or mobile/email CRM program, there are still opportunities to extend the relationship and create additional value. One example is to launch a limited-time continuity program just during Q1, like Rite Aid did by rewarding customers for money spent during the first month of the year.
Holiday is, rightly, one of your biggest priorities as a retailer. However, the first quarter of the year holds extraordinary promise, both from a sales and customer acquisition and retention perspective. By focusing on specific opportunities to generate sales, grow consumer trust, and hold on to new shoppers, you’ll not only help your brand to stand out among competitors, but also give your sales numbers the boost necessary to start the year off on the right foot.