What Retailers Should Keep in Mind Heading into the Holidays
We all know that the holiday season is critical for many retailers’ success as it can make or break the entire year. Performance over the holidays can be lead indicators for the success of the brand the following year, as well as overall brand strength. And it just so happens to occur at the end of the year, which makes the stakes that much higher. With a predominantly retail-laden portfolio with battle-tested strategies, we were able to analyze over 40M+ clicks, across $200M+ in media spend, and $1B in attributed revenue to come to data-backed predictions leading into this holiday season.
Here are some of those most impactful performance trends:
- The cost of marketing is set to increase (anywhere from 11% to 48%). We realize this is a pretty wide range, with a lot of dispersion related to top-line business goals. However, you can and should expect the cost of marketing to go up. What cost you $1 during non-holiday months will cost you at least $11.11 during peak shopping times. This, of course, can be controlled through various tactics, but planning to expect this increase is paramount. Real-time reaction and implementation are fundamental to navigating the choppy waters of a more competitive media landscape during holidays.
- The consumer propensity to buy more will be about 50% higher than LY (and 248% higher than non-holiday timeframes). We expect to see an even bigger emphasis on e-commerce this holiday season, culminating during Black Friday and Cyber Monday week, as well as near the end of the season for last-minute shopping. The revenue driven by a single click will increase drastically, especially when compared to non-holiday times, which makes it worth that increase in costs. There are many ways of looking at the success of a campaign — such as analyzing every angle in digital, through traditional metrics as well as additional nuances — but with that in mind, a non-traditional metric to watch is revenue driven by click. Monitoring this metric closely can speak to the quality of traffic being driven by your marketing efforts, ultimately leading you to a successful holiday season.
- Expect gains in ROI despite increased competition and compressed market. Each and every year, despite the increased costs, crowded marketplace, and competition, we expect to see the return on investment to increase when compared to last year and non-holiday time frames. ROI should be considered the outcome of a plan well executed (across all facets, not just media) rather than a goal. However, time and time again we see our portfolio’s return increase during the same period last year. We expect this year to be much of the same. To enable this, develop a strong marketing plan, execute correctly, course correct when needed (and fast), and you should see the same results. Above and beyond the numbers, there are growing consumer demands and trends in the marketplace that can help truly differentiate your brand during this most crucial season. We’re not saying they are easy, but if these trends were easy, then everyone would be doing them.
- The quicker the better when it comes to shipping. The race for convenience has never been more competitive. Amazon’s presence in almost every vertical and major global market has forced all other brands to react. Consumers are now asking more and more from brands. They are in a hurry, shopping late, and expect instant fulfillment. Same-day shipping, one-day shipping, two-day shipping, and BOPIS (Buy online pick-up in-store) are now more prevalent (and necessary) than ever. We recommend taking a “hurry up, I’m in a hurry” mentality by ensuring, at the very least, that the path to purchase is seamless across channels.
- We’re always open for business. Despite the negative sentiment in countless articles threatening the impending retail apocalypse, digital media tends to be the catch-all solution for retailers that are experiencing headwinds, especially as it retains to omnichannel success. In many cases, as brick-and-mortar regresses, digital media is then put front and center to catch demand where a physical location cannot be found. Especially when paired with a convenient shipping option, a strong emphasis on geo-targeted efforts in digital where locations may have once existed is strongly suggested.
- New media opportunities worth your attention. Each and every year, especially in digital media, there are new avenues to explore and opportunities for engaging with consumers. This year is no different, starting with the ‘streaming wars.’ As it relates to the retail industry, Hulu is a clear front-runner for brands as it has long been a great experience for both consumers and advertisers alike. As the streaming options begin to proliferate with Disney+, Roku, AppleTV+, Amazon Fire Stick, and YouTube TV, to name a few, so do brand marketer’s options to reach those on the ‘big screen’ in a more meaningful, data-rich way. We’re also seeing NBCU toying around with QR codes during Live and Prime TV. Pretty compelling stuff for marketers. And let’s not forget Amazon either. Whether you are currently using Amazon for marketing purposes or not, now would be a good time to at least test the platform. Their audience offering is only getting better along with new DSP capabilities, as well as extremely rich opportunities within Amazon itself. Other opportunities that have potential include the likes of Xandr (AT&T’s programmatic arm), podcasting, additional programmatic offerings, and the emergence of digital out-of-home offerings that make a lot of sense during high travel seasons.
As I mentioned earlier, with any holiday season in the retail space, starting with an extreme level of detail and data points can help to build the foundation. Couple that foundation with contingency planning, a willingness to explore new opportunities, and an all-hands-on-deck approach will lead to success this season.
-Nick Drabicky, VP of Client Strategy, PMG