How COVID Changed Consumer Rewards

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The COVID-19 pandemic has dramatically shifted how consumers shop, spend and pay. These radical changes in consumer behavior have significantly impacted how businesses need to create and manage their consumer rewards and incentives programs. Without modernization, rewards will be less, well, rewarding, and incentives will ultimately fail to motivate recipients to take desired actions.

When designing a consumer rewards and incentives program for 2021 or beyond, keep in mind the ways that COVID has changed rewards—possibly forever:

• Digital is now table stakes: COVID-19 has accelerated digital adoption in many facets of peoples’ lives. Throughout the pandemic, the necessity of relying on digital transactions and interactions has pushed even the not-so-tech-savvy into behaviors like online shopping, telehealth visits and working remotely. This flight to digital is likely here to stay. Similarly, for reasons of both safety and convenience, it is now critical that rewards have an option for digital delivery and redemption. eGifts are versatile rewards delivered via email that offer redemption flexibility since they can be spent online, scanned in-store, or in many cases added to a mobile wallet. The move to digital can also help reward managers increase efficiency and cut overhead: rewards delivered directly to recipients’ device don’t require printing and shipping costs.

• We want them here and now: Timing is everything: for more than half of respondents to a recent rewards survey, the impact of a reward would be lessened if it took too long to receive it. (More than half of respondents defined “too long” as two weeks or more.) During challenging times, it is more important than ever to deliver rewards and messages of thanks or appreciation to motivate your consumers in a timely manner. Additionally, rewards must meet recipients where they are now. The pandemic has trained consumers to expect brands to come to them—whether that’s online or in store. That means rewards must now show up in email but also be redeemable in-person, etc. Rewards need to integrate with the unified commerce of the future.

• Choice is preeminent: As many consumers grapple to recover from the economic devastation of the pandemic, rewards that can be spent on necessities versus luxuries will be welcomed (i.e. prepaid cards that recipients can spend almost everywhere like a debit card.) While digital rewards are helpful during lockdowns and for those strict about their social distancing, other consumers are returning to work and shopping and are receiving their vaccines and will perhaps prefer rewards with a physical or digital redemption option. So, omnichannel flexibility will remain key, despite growth in digital.

• Category preferences has shifted: As lifestyles have changed in the last 12 months, so too have preferences for the types of goods and services that consumers want and need. For instance, streaming entertainment, food delivery services, gaming and athleisure have all surged in demand. When designing a rewards program, it is critical to consider trends like this and ensure you select a rewards vendor with a broad enough portfolio to motivate your shoppers throughout the changing tides of consumer preference. (There are also vendors with marketplaces that allow discounted bulk ordering, which can save money versus buying gift card rewards in stores.)

• Charity is top of mind: Apart from shopping and working adjustments, the pandemic has certainly brought a larger perspective shift as well. Uncertainty and lockdown restrictions have created economic chaos, and many are struggling. People have responded with an outpouring of charity and support. Last year, large segments of consumers surveyed reported using gift cards and egifts for charity or kindness during the crisis, such as contributing to a gift card for a person or family in need (31%), sending gift cards to healthcare workers (31%) or purchasing a gift card from a business they care about that is closed or struggling during the crisis (26%). Rewards that can respond to this desire to do good will be well received in today’s climate.

As hope draws nearer for an end to the pandemic, the fact remains that the world and consumer behavior are changed forever. Expectations for a unified commerce, omnichannel experience are here to stay. Additionally, community mindedness is surging. It’s time to ensure your rewards program is in-line with the post-COVID consumer. In turn, you can boost brand engagement, reach new customers or drive loyalty.

1 Think with Google: COVID-19 has accelerated digital adoption — the time to transform is now, 2020.

2 “The Employee Appreciation Survey” was an online survey conducted by SurveyMonkey on behalf of Blackhawk Network between January 29–31, 2021. The sample size included 2,000 U.S. respondents ages 18+.

3 The “Paying for things and giving gifts during a crisis” report is based on the findings of an internet-based survey conducted by SurveyMonkey on behalf of Blackhawk Network on March 31, 2020. The sample size included 1,067 respondents ages 18+.

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