Story Highlight
– Retail gains 1.5 million new customers during Christmas.
– Only 19% return within three months post-Christmas.
– Watch gifting complicates customer relationship data for retailers.
– Retailers need to capture gifting intent for better insights.
– Spring analysis reveals long-term customer behavior trends.
Full Story
As the retail landscape reflects on the festive trading period, a critical analysis often highlights the metrics of sales, foot traffic, and new customer acquisition. However, the aftermath of the Christmas shopping rush is seldom scrutinised in depth.
A recent study by Reward, which examined over 1.4 billion UK card transactions, has revealed that retailers typically see an influx of approximately 1.5 million new customers in November and December. Remarkably, only 19% of these December patrons return to make further purchases within three months—lower than the 23-26% observed during other times of the year.
The dynamics of gifting during the Christmas season further complicate customer retention in the watch sector. Frequently, the individual paying for a watch does not necessarily share a personal connection with the product. For instance, a wife might purchase a significant gift—a mechanical watch—for her husband. In this scenario, while the retailer records her details as the buyer, it’s her husband who engages with the product, such as getting it adjusted for size, researching the brand, or eventually seeking upgrades or additional pieces.
This phenomenon creates a notable gap in understanding the customer landscape. Retailers can identify the purchaser through billing data, but they lack insight into who truly desires the watch and will utilize it regularly. The data may reveal who returns for repairs or new accessories, or who evolves into an enthusiastic collector—an outcome retailers would be keen to track closely. Wishlists play an important role in clarifying these dynamics, illustrating who initially expressed interest in the product prior to the purchase.
Moreover, a watch provides several opportunities for ongoing engagement beyond the initial sale, such as adjustments, servicing, and participation in collector events. These interactions can foster customer loyalty without necessitating immediate further sales. While some brands may eventually connect with the gift recipient via warranty registrations or service updates, this information is often siloed among different teams—each aware of only partial customer interactions.
As the winter months progress into spring, patterns begin to emerge regarding customer retention. By analysing post-Christmas engagement, retailers can identify which gift recipients actively return, thereby revealing the potential for ongoing relationships initiated from holiday purchases. The jewellery market offers an additional indicator with Valentine’s Day, where earlier gifting trends can either reinforce ongoing customer engagement or require brands to begin anew.
While evaluating customer loyalty simply after a 90-day period may overlook deeper, more nuanced relationships, particularly for serious collectors, signs of engagement can surface through various channels. A collector might not make a purchase immediately but may still interact meaningfully through service appointments or inquiries about new releases.
The groundwork for lasting customer relationships begins with the initial purchase. By effectively capturing gifting intent and providing value in aftercare, retailers have the opportunity to connect with both the sender and the recipient, thus bridging the gap created by gifting.
By March, insights into customer behaviour following the Christmas season are considerably clearer. Retailers can discern which recipients have transitioned into regular clients and which transactions have sparked ongoing relationships, leading to a more comprehensive understanding of the holiday trading period.
Hannah Alley, a consultant in luxury marketing and retail, brings over ten years of expertise across various sectors. She has worked with brands on strategies for customer engagement and commercial growth, drawing from her previous role at Selfridges HQ.
