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Quote:Customer acquisition is important in any holiday retail strategy. But as e-commerce matures, retailers also should look to build richer relationships with existing customers. Loyalty and rewards programs provide an excellent avenue to increase customer trust.

This is especially valuable as customer acquisition costs continue to climb. It is more important than ever to maximize each customer’s transaction, and increasing gross margin is tough in the frictionless environment of the Internet.

Research shows that customers in loyalty programs spend more. Working with a partner, retailers can have loyalty programs integrated with their site, offering valuable programs under their brand name. For example, retailers might wish to let consumers receive savings and cash rebates from participating online merchants....

Quote:Members of retailer loyalty programs tend to spend more and shop across more channels, according to "The Loyalty Effect: Retail Loyalty/Reward Programs' Impact on the 2006 Holiday Season" published by Epsilon. The report calls for retailers to begin loyalty membership campaigns early in the year and build toward the holiday in the fall.

Loyalty program members accounted for 48 percent of holiday shoppers in the 2006. Non-loyalty members primarily shopped at brick-and-mortar locations, while only 22 percent of loyalty members shopped in stores. Two-thirds of loyalty members shopped online, and 41 percent ordered from a catalog or through the mail.

Members of loyalty programs tend to be more affluent, with incomes of $100,000 or higher...