Want to save the High Street? Stop targeting customers
Sounds controversial, right? Most marketers spend huge portions of their time and budget making sure they run the best campaigns possible. Usually, ‘best’ means ‘most highly-targeted’. And with good reason - being more targeted means you have a better chance of bringing new customers in-store for the lowest price possible.
But is it really the best approach for the High Street? We all know it’s in trouble: footfall has been consistently falling year-on-year, thanks to increased competition from digital channels and changing consumer behaviour. To revive it, we need to drastically change our thinking about how we target consumers. We need to not only encourage them to visit, but to keep them coming back.
Why the High Street is struggling
It’s not news that the High Street is struggling. Empty shop-fronts are increasingly common, and barely a day goes by without hearing of another well-known brand in trouble. This month alone PizzaExpress announced that they’re in a huge amount of debt, while Links of London went into administration. Over 60,000 retail jobs were lost in the past year.
It’s also no surprise that this is, in large part, due to competition from online channels. The internet is now a way of life for most people – the average person spends 100 days online every year and 87% of shoppers start their research online.
In the space of 10 years, our shopping habits have changed completely. Now, everything from our weekly food shop, to managing our money, buying clothes and ordering takeaways happens online.
Obviously, it’s a tough time for retailers. Budgets are tight, rents are increasing and everyone is uncertain about the impact of Brexit. But we’ve been saying all this for years, and nothing seems to be turning the tide.
But that’s not because it can’t be changed. The High Street is far from dead: while most of us might research online, the majority of purchases still happen in-store. Online and offline experiences can co-exist and there’s still plenty of consumer appetite for visiting a bricks-and-mortar store – we’re just not approaching it in the right way. Rethinking the way we target offers could help.
Think beyond acquisition and incrementality
The problem is that High Street brands are only focusing on acquisition or incrementality. I spend the majority of each day talking to retailers about how to increase customer engagement, and they all have lots of creative methods for getting people in-store. But not many are thinking about what happens after that.
Generally, retailers are still only interested in attracting new customers (one who hasn’t spent in 12 months). To get them in-store, they’ll target those customers with bigger incentives. It’s a tried and tested method, and one that seems to make sense. Why waste their limited budget on giving away an offer to someone who might come in anyway?
My question to those retailers is always the same: why is that a waste? You’ll never consistently drive enough one-off visits to save the High Street. Instead, it’s time to think holistically. Shift your focus from only targeting new customers, and offers could help you not only drive traffic, but encourage retention, too.
How card-linked loyalty can help
To increase and sustain footfall, you need to think about how you can get both old and new customers in the door. Instead of targeting new customers only, think about how you can use offers to create customer loyalty and encourage repeat visits.
We all know how important retention can be: famously, it can cost up to five times more to win a new customer than to retain an existing one. And according to research, increasing customer retention rates by 5% increases profits by up to 95%. In that context, focusing on customer loyalty is a no-brainer. But historically it’s been hard to do well because there wasn’t good access to data, or a frictionless way to do it. Now there is: card-linking.
With card-linking technology, consumers can easily enrol their payment card to a loyalty or discount program (typically known as a publisher). They then shop as usual, with no need to remember store cards, vouchers or QR codes. When they make a purchase with their enrolled card at a store participating in the programme, the discount is automatically applied in real-time.
What it means for the High Street
By moving away from targeted offers, brands committing to card-linked offers through Fidel’s publishers have seen two key highlights this year:
- intu shopping centre saw a 47% increased transaction amount since launching an in-store card-linked offers loyalty program.
- A live offer with Aer Lingus was used an average of 5 times by every customer who linked their card.
Focusing on longer-term retention that keeps customers coming back to the High Street is the only way to save it. Card-linked loyalty programmes help achieve exactly that. By slotting seamlessly into everyday shopping, they keep customers engaged and loyal. So my advice to retailers is this: stop narrowing your focus with targeting, and start thinking about how you can deliver the best experience to the widest pool possible. It’ll get more customers in-store – and it will keep them there.
Check out our case study with intu to find out more about how card-linked offers are helping retailers increase footfall and average transaction value.