The Centre for Retail Research has revised its forecast for 2020, predicting total retail sales will fall overall by £17,281million (-4.6%) compared to 2019 due to the pandemic.
With many retailers having had to close their doors and rely only on online for a significant portion of 2020, the fourth, and so called ‘golden’, quarter will be more important than ever to recoup lost sales. Upcoming peak dates such as Singles’ Day and Black Friday will be critical to help brands on the road to recovery.
The good news is that indications suggest consumers still plan to spend big over the peak shopping season. Over 70% of shoppers do not plan to decrease spending at all this year and 73% of holiday shoppers will purchase primarily online, regardless of a potential return to lockdown.
That said, the impact of COVID-19 will be felt. Here are the key consumer trends we have seen from our recent research and network data that retailers should use to build their strategies and drive revenue in this year’s unique golden quarter:
Consumers have developed new shopping habits
As people have adapted to the pandemic, they have changed how they shop.
Firstly, they are consuming more online content before buying. While content publishers may not be as valued on the last click model, they can introduce brands to new customers at the start of the journey and retain a connection with existing shoppers. As online content increasingly inspires shoppers throughout the purchase journey from discovery to purchase, these upper funnel publishers, such as content sites or influencers, have become more influential than ever. Similarly, voucher sites are driving large increases in unique shoppers within the network as more consumers look for ways to save. This is particularly important for categories where items are deemed non-essential.
Secondly, it’s important to note when building a Q4 strategy that shifts in behaviour differ by vertical, so a deep audience understanding is key. Advertisers should create a plan for each partner type so they can deliver personalised, dynamic messages to target customers throughout the journey to purchase.
There are ‘new’ online customers
Customers who shopped online during lockdown for the first time present opportunities for brands. Data from our recent publisher survey shows loyalty and rewards publishers have seen a 71% increase from visitors in the 50+ demographic, whilst voucher sites and content publishers report 40% and 25% increases respectively. These people now trust digital commerce and are likely to continue those behaviours during the peak period.
This group of new-to-online shoppers needs to be nurtured and engaged through compelling content and strategically placed rewards. Although advertisers have limited data on their purchase likes and intents, they must use what is known about these new-to-online shoppers to keep them shopping online. Bring these shoppers back again by thanking them for their order and reward them for subsequent purchases.
To capture these shoppers advertisers should also invest in low-risk upper funnel strategies such as social media advertising, paid search and Comparison Shopping Services (CSS publishers), which leverage Google Shopping placements to promote products and services. Moreover, referrals from friends and family have the biggest influence on holiday shopping (47%) so using referral publishers means ‘new-to-online’ shoppers can share their experiences among their network and encourage them to shop online too.
Focus on gift-shoppers and new markets to ensure peak performance
With reports of coronavirus cases quickly rising again, brands will need to ensure their strategy will be effective this golden quarter regardless of whether new restrictions are introduced. By focusing on gift shoppers, brands can broaden their targeting pools to capture consumers who are not their usual target audience.
Factors that influence gift purchases such as immediate need (19%) and efficiency (11%) can be communicated to these groups to help brands drive sales. Where prices may not be as competitive, messages can focus more on the customer experience, product availability and distribution/shipping times to make up for the lack of discounts, without compromising product margins.
Furthermore, as COVID-19 impacts people in different ways around the world, brands with an international presence will be affected by regional responses. Expand and adapt international strategies to balance underperforming campaigns in different markets. By taking a global approach brands can ensure they maximise the peak opportunity.
A mobile strategy is a ‘must have’
Of people making online purchases, 54% plan to purchase on their mobile so an effective mobile strategy will be essential for brands in converting consumers this golden quarter.
In-app tracking enables advertisers to track in-app conversions and effectively enhance their campaigns for mobile app users. Brands can better understand and track mobile activity and consumer behaviour with the view of optimising the consumer experience wherever they are shopping.
Consumers will prioritise value
Our research indicates that despite 40+% of global holiday shoppers citing a decrease in household income due to COVID-19, 87% of people will still be shopping for holidays such as Christmas and 57% will shop during Black Friday. However, for the UK shoppers sales and discounts will be the most influential factor (47%) driving holiday purchases, with 32% of consumers planning to change when they shop to save more money.
For brands, cashback and rewards will be an empowering tool to incentivise shoppers to invest. In fashion, voucher and coupon publishers have been particularly effective in driving conversions. ‘Dynamic commissioning’ where retailers increase cashback on products or categories with higher margins, higher price points or based on seasonal trends, can be used to stimulate purchases. For publishers, many advertisers offer a higher commission for new customers to encourage acquisition or a flat rate to ensure loyal customers are rewarded.
‘Voucher code commissioning’ also lets advertisers track the effectiveness of particular partnerships. Advertisers can use exclusive codes to boost conversions while ensuring commission is only paid to the publishers that campaigns are being run with.
Many advertisers are also using AI tools to provide publishers with the ability to serve personalised ads and discounts based on past shopping behaviours. Using a tailored approach to communicate value will further encourage brand engagement.
Continual optimisation during and beyond the Golden Quarter
Alongside optimism about spending over the golden quarter, 54% of global consumers have said that, compared to last year, there will be no change to their spend for key shopping dates in early 2021, such as Chinese New Year and Valentine’s Day.
With shopping behaviour continually changing as the pandemic evolves, being able to make smarter content-serving decisions in real time will remain imperative for a long time. Brands can utilise Affiliate Consumer Graph for campaigns in Q4 and into 2021 to gather unique insights based on consumers’ browsing and shopping behaviour and then strengthen their campaigns based on this information. This means brands can create more personalised experiences that are relevant to the consumer’s mindset and target them based on their purchase history.
Ultimately, the road to recovery is likely to have twists and turns. Performance across the 2020 peak shopping period should be used by brands to build strategies for 2021 but it will also be imperative that they continue to monitor shopping behaviour throughout the year so they are ready to continually adapt.