Tackling logistical challenges with new tech.
The situation is dire. A survey found that more than one-in-three Americans would be happy to never set foot in a store ever again. Even though the wave of ecommerce continued to get bigger and bigger each year before the COVID-19 pandemic, simply cutting out the essential brick-and-mortar footprint for brands would be catastrophic. Places have been making due, and consumers have been able to roll with the punches as the pandemic stretches on. The same survey found that nearly three-quarters of the 2,000 people polled said they are more likely to shop at stores that offer contactless, curbside pickup than places without these services. This is all to say that we should expect the unexpected this holiday season.
“It used to be that Black Friday was the focal point of all holiday seasons—concentrated into a few hours of heavy shopping,” Simeon Siegel, analyst at BMO Capital Markets, told the Wall Street Journal. “Black Friday became Black Friday weekend, and then Black November.” Siegel is talking about the 2020 tendency for some retail brands to react in the short-term-turned-long-term by taking a Cyber Monday and Black Friday mentality, offering huge ecommerce discounts to consumers to spur demand. While that certainly helped tackle logistical problems, it has the potential to create substantial economic pain.
“The greater amount of time the retailer needs to fight for consumer dollars, the more reactive and promotional retailers will likely be,” noted Mr. Siegel. Yet across-the-board promotions and discounts won’t heal retailers that have struggled this year. Exacerbated by heightened panic and fear about the economy, some brands feel it’s the only solution right now. The thinking goes that it’s a way for retailers to demonstrate compassion for consumers suffering from financial constraints.
Yet this assumes people will be spending at all. Consumer spending on gifts may not come to a screeching halt, but they are definitely planning to spend less than they have in the past.
According to data from Morning Consult, a smaller share of US adults expect to spend over $300 on holiday gifts this year compared to previous seasons. Only 19 percent of respondents said they would reach into the $500 range — a hefty decrease of 6 percent points from 2019 alone.
In this incredibly important shopping period amidst an increasingly difficult outlook, brands need more sophisticated ways to market, target and engage consumers — that’s where behavioral targeting and segmentation come in.
In a COVID world, marketers want to get the best possible ROI on any campaign, let alone one geared toward holiday shoppers. To do that, they must deliver promotions that match a niche audience’s previous behavior instead of casting a wide, generic net to just hope to drive conversions. At this point, even showing products to consumers in particular demographics that they may be inclined to buy the most won’t work. Instead, it will be up to brands to capitalize on tech that offers key promotions that align with a consumer’s previous behavior. These, in turn, are much more likely to convert customers. Such motivation-based personalization and behavioral targeting builds toward a customer profile that tailors custom marketing messages accordingly.
People across all income levels have been forced to economize their spending during the pandemic, and some — if not all — of this spending reluctance will continue. By targeting the customers willing to spend at full-price, brands will unlock the sales efficiency they need to keep them afloat through the 2020 holiday shopping season.
Interested in learning more? We would love to help with your promotional marketing needs. Learn more about how RevTrax can help your brand during this holiday season by speaking with a specialist today.