Friday, January 22, 2021
“Brands that optimized their eGift and gift card eCommerce experience won this holiday season," McEndree said. "As consumer behavior continued the rapid, digital migration, gift card programs are no exception. This is a huge win for retailers, as gift card recipients show up ready and excited to use them.”
McEndree additionally noted that nearly half the consumers surveyed expect to spend at least $25 more than the value of their gift cards, which many will use in the first few months of the post-holiday season.
In addition to their predilection for ecommerce and digital gift card sales, survey respondents did 68 percent of their holiday shopping online, exceeding the 60 percent that Blackhawk Network had predicted. While increases in online and in-app shopping were largely due to business shutdowns and safety concerns during the pandemic, retail analysts expect digital shopping to remain a permanent fixture in the retail landscape.
A report published in August 2020 by McKinsey & Co., Retail Reimagined: The New Era for Customer Experience, found that 40 percent of consumers tried new brands or purchased from new retailers instead of remaining loyal to tried and true labels and retailers. Researchers cited lower prices, relevant promotions, social connectedness and communicating in preferred channels as motivations for switching brands during the pandemic.
McKinsey researchers recommended updating aging retail infrastructures to meet changing customer preferences, many of which will outlive the pandemic. "In the short term, companies need a complete understanding of which new, COVID-19-era habits will stick and which won’t, and for what segments," they wrote. "The surge in online shopping, for instance, is likely to spur a sustained increase in buy online/pickup in-store options—roughly half of consumers who used this option during the shutdown say they intend to keep using it."
Blackhawk surveyed 50,000 U.S. merchant locations over a two-year period and found 41 percent of respondents tried payment schemes in 2020 they had not previously used; 37 percent intend to continue using these alternative payment methods. Digital wallet usage was also up, with almost one in four shoppers using a mobile wallet for the first time.
McKinsey surveyed more than 2,500 consumers in the United States, United Kingdom, France, and Germany to understand how consumer behavior is changing. The research, conducted prior to and during shutdowns, examined what changed and what trends will likely stick. Findings suggest that retail is being reshaped by a global migration to online, digital and mobile payment methods. Retailers need to implement in-store technologies to meet consumers where they pay, McKinsey researchers noted. Recommended technologies include pay-by-phone at the POS, mobile ordering ahead and digital screen browsing at in-store kiosks.
"Such technology not only provides next-level customer experience; it also gives retailers access to valuable data that can feed into personalization algorithms or be used to optimize prices and promotions," McKinsey researchers wrote, adding that the future can’t wait and retailers must move quickly to reinvent the customer experience.
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