BOSTON: Two thirds of US retailers risk missing out on the back-to-school shopping season by failing to exploit loyalty programs, it has been claimed.
An update from Merchant Warehouse, a provider of payment technologies, said that just 34% of retailers were expecting to leverage a loyalty or rewards program during the current back-to-school shopping season, despite this being the second largest shopping season in the US after the winter holiday, worth $76.9bn.
Figures from the National Retail Federation show that the average family with children in grades K-12 will spend $669 this year, up 5% from last year for a total of $26.5bn, while college students and their parents will spend an average $916, up 10% for a total of $48.4 billion.
Merchant Warehouse reported the finding that 85% of back-to-school shoppers return to the same stores every year but said 91% would shop elsewhere if a store offered a promotion or reward.
While 72% of back-to-school shoppers are already in loyalty programs with their favourite retailers, 66% indicated they would sign up for a retailer loyalty program during back-to-school shopping if offered a discount at the checkout. And for most (53%) price is a determining factor in where they shop.
In addition to driving increased sales during the shopping season, Merchant Warehouse suggested that retailers implementing effective programs could expect to reap additional rewards in the months ahead as loyalty programs were capable of increasing a brand's market share by 20% and improving customer acquisition by up to 10%.
Among those retailers already executing loyalty campaigns targeting back-to-school shoppers, social media emerged as the most popular method, cited by 21%. Paper coupons were favoured by 14% and plastic loyalty cards by 13%, while mobile apps (9%) have yet to make significant inroads.
When consumers were asked their preferred method of getting rewards when shopping for back-to-school items, 49% chose to receive these rewards through social media.
Data sourced from Merchant Warehouse, NRF; additional content by Warc staff