With only a month until Black Friday, thoughts are definitely now focused on peak, the Christmas period… and beyond. For retailers and marketers, this is the peak trading period, but with economic uncertainty, and coronavirus hanging around like leftover Christmas turkey, it is fair to say that this year’s festive season is likely to be a bit different than usual and tweaking last year’s plan probably won’t cut it. My LinkedIn feed is awash with articles and webinars predicting what might happen, but the simple truth is no-one really knows what is going to happen. None of the predictive models have a “global pandemic” parameter and primary research is not likely to help as no customers really know how they’ll be spending in 2-3 months’ time. I previously wrote an article on the big picture trends impacting retail for this peak and beyond, but I also wanted to explore some tactical wins retailers can potentially employ to make it a happy Christmas.
Before that, despite all the uncertainty, it is worth reminding ourselves of some of the things we do know:
- There’s been nearly 700,000 jobs lost since March and unemployment is at its highest rate in 2 years, with further redundancies expected as the furlough scheme comes to an end.
- Coronavirus cases are increasing with various local & national lockdown rules coming back into force.
- Retail sales for August were up 4.1% vs. last year, though this is buoyed by grocery retail, with non-food retail still down by -3.7%.
- Consumer confidence dropped sharply during lockdown and has only shown small signs of recovery.
- Despite stores reopening in June, retail footfall is still down more than 20% vs. last year.
- Online sales for August are up 53% YoY, but down 7% vs. last month, meaning they account for 26.6% of total retail, compared to 18.1% last year.
- UK adspend is forecast to be down 17% YoY for 2020. We’ve also seen CPCs decrease for our clients, meaning we can drive increased efficiency with their ad spend.
What does this all mean? This tells me that customers are trying to get back to something approaching “normal”, but there are still many constraints hindering their ability to do so, and for retailers to serve them.
For what it is worth, my advice for planning peak 2020, is to make lots of plans. Try to map out as many different scenarios that you can think of, how they’d impact your business, and a plan for how you’d react to each one them that you can quickly put into action. What happens if we are forced into lockdown again and stores have to close? What if your competitor turns Black Friday into a month-long event to shift stock? What if unemployment doubles? Each of these will need a different approach for how you communicate with and sell to your customers, so it is better to be prepared.
With that in mind, here are some of the tactics we would recommend including in your plans:
- Be flexible with budgets – depending on which scenarios play out, you will need to quickly divert funds into different campaigns, channels & audiences
- Be brave – with media costs lower than usual and brands pulling back their activity, maintaining spend will lead to an increase in ESOV (excess share of voice), which directly correlates with increases in market share
- Trust your tech – the benefit of using AI to optimise media budgets & bidding means that you don’t need to be monitoring CPCs daily to check if anything has gone haywire. Instead, trust the tech that you’ve invested in to do its job and identify where & when to invest your budget for the greatest return
- Be ready to go early, or late! – as customers become increasingly exasperated, they could be tempted to splash their Xmas budget on themselves in October. Or they could see Xmas as even more important in a bid for normality in a world gone mad. Keep an eye on market demand and react accordingly.
- Feel the mood – keep an eye on trends on social media and piggy-back on those that are relevant to your brand through your own accounts, but use paid social to amplify your content and drive meaningful reach
- Take a more generic approach – it feels like sacrilege to say it, but with so much uncertainty around, your personalisation AI is going to be less reliable, so instead try to maximise visibility and availability, so customers can find you and the products they want, when they want them
- Have local plans – with different lockdown rules in place across the country, you will likely need a different approach for different regions or towns
- But be true to yourselves – whilst the constraints we operate under may have changed, the underlying needs of customers haven’t. Don’t tear up your strategy trying to chase short-term sales & ROI. If you’re a premium brand, continue to focus on the benefits of your offer, rather than get dragged into a price war. Price perception & sensitivity can be a tough thing to recover from
Regardless of what happens, this festive period will be fascinating and nerve-shredding for retailers & brands, but hopefully the advice above can help to bring some clarity & focus amidst the chaos. Season’s greetings & good will to all!