While the holiday season can bring joy and excitement, it’s also a time when consumers face a lot of challenges and frustration about their finances. According to an Experian survey, holiday shopping causes 30% of consumers to feel stressed. It’s no surprise – having enough money to purchase gifts, getting into debt to cover expenses, and preventing identity theft while shopping online are many issues on consumers’ mind. With the Black Friday and Cyber Monday frenzy behind us, the remaining holiday weeks present a prime opportunity for credit card issuers and financial institutions to help their customers through the hurdles of financial stress, credit worries, and security threats.
Guide your customers to last-minute savings.
While the top financial New Year’s resolution is to save money, according to the survey, we also found that consumers are planning to spend an average of $846 on gifts this season – up 14% from last year. Shoppers already got off to a rapid start as reports show that consumers spent an average of about $315 over the Thanksgiving weekend.
In terms of shopping behavior, our study revealed that Millennials are 88% more likely than the average consumer to open a credit card for holiday shopping to take advantage of retail discounts. Baby boomers are more likely to shop in a brick-and-mortar, while Millennials and African Americans are more likely to shop on their computers or mobile devices. In fact, according to Adobe Analytics, shoppers spent $7.9 billion on Cyber Monday, up 19.3% from last year, which is a record and one of the largest e-commerce days for the country. Our research also shows that many consumers are seeking last-minute deals closer to the holidays, especially those who make less than $50K annually.
It’s not too late to leverage this shopping season to engage your customers and help them save during this stressful time, which could build the foundation for a positive long-term relationship. Credit card issuers can achieve this goal by providing extra incentives, either cash or rewards points, to those who are thinking about opening a new card in December, and help consumers understand the benefits. In order to better identify what these specific programs should be, issuers and financial institutions can capitalize on advanced data and identity methods, such as device intelligence and behavioral biometrics. These methods are designed to recognize customers and shed light on their customer journey and receptivity.
Provide budgeting and credit tools.
Offering credit education tools, budget tips and templates will go a long way in helping your customers better understand how extra holiday expenses will affect their finances and credit scores. Only a third of survey respondents said they have set aside a budget for holiday shopping this year, and about the same percentage of respondents said they haven’t done so in the past. Hurting their finances even more are unexpected costs that always seem to come up during the holidays; the top five most frustrating are unexpected gifts, travel costs, mailing costs, delivery costs, and gift wrap. In fact, 29% of consumers said they have actually spent more on unexpected expenses than on gifts. Additionally, Millennials are the most concerned about how their purchasing decisions will affect their credit scores.
Not only do financial institutions and credit card issuers have a responsibility to offer easy-to-understand budgeting and credit education, but this proactive initiative can also help to establish greater engagement. Credit education is particularly important for younger consumers, who are just learning budget basics and might not know the impact of a buy now, pay later plan, or using a retail credit card versus a brand credit card. Financial institutions and card issuers can communicate helpful tips via email, push notifications to app users, and reminders available in their online accounts. By helping customers brush up on this knowledge over the next few weeks, card issuers and banks can build brand affinity with new and loyal customers alike.
Offer customers the option of ID protection services.
Only a little more than half of consumers say they will be vigilant when shopping online, and more than three out of four agree that their banks and credit card issuers should take more precautions to protect customers during the holiday season. Consumers are generally placing their trust and expectations in the hands of businesses, which means financial institutions have a responsibility to keep this trust top of mind and find ways to make sure their customers know. Offering ID protection as part of a membership package helps differentiate your organization, engage customers, and show them that you have their back.
Whether it’s saving, improving credit scores, or taking action on identity theft protection, financial institutions and card issuers should listen to their customers, which will help identify marketing opportunities presented in the customer journey. Customers appreciate messages and deals that are relevant to them, so taking proactive steps to accomplish this goal doesn’t necessarily have to mean heavy lifting. The holidays are a key time of year to engage with customers and help them manage their finances. By being there for them every step of the way, you will be even closer to building and maintaining mutually beneficial customer relationships for the long term.