Consumer needs and behaviors are changing rapidly, challenging retail marketers to keep pace with quickly evolving habits and preferences. For example, at the beginning of the pandemic when many airlines were gearing up for the summer vacation travel boom, consumers were shifting their dollars to home goods, loungewear and bread makers, and pausing on airline tickets. Last year saw drastic shifts in how consumers shopped. On Black Friday, for example, in-store traffic dropped 52.1 percent vs. 2019, according to Sensormatic Solutions. Consumers spent more time shopping online, with clicks up 29 percent year-over-year, as seen by Rakuten Advertising’s U.S. retail affiliate network.
Despite this continued unpredictability, we see a few trends carrying over from last year into 2021. Here are the top three shifts that will persist and what retail marketers can do to adjust in 2021:
1. Inventory: Retailers Will Need to Rethink Traditional Calendars
Historically, buying and planning patterns have been largely predictable when tied to a seasonal calendar. However, since the onset of the pandemic, those calendars are no longer reliable. Consumers are shifting their spend based on pandemic restrictions and lifestyle changes.
The unpredictability of consumer demand and a move away from traditional seasonal calendars means that retailers can’t plan their inventory in the ways they typically do. For example, the demand for winter apparel has diminished as people continue to stay in and work from home. In March and April of last year — swimsuit buying season — retailers saw a deluge of swimwear inventory as consumers cancelled spring and early summer trips.
By working with key partners, such as content publishers or loyalty networks that can provide data on the behaviors of their audiences, retail marketers can better identify what categories are performing well and then adjust marketing spend accordingly. Strong partners will have a specialized look into how consumers are spending. This insight is key for retailers to remain agile and quickly pivot inventory priorities based on consumer demand.
2. Longer Deal Windows: Brands Will Continue to Offer Deals for Longer Periods of Time to Improve Revenue
In 2020, we saw more retailers offer holiday deals throughout the month of November (and earlier) instead of focusing solely on Black Friday and Cyber Monday. In 2021, longer deal cycles will likely continue, a transition from the typical day, weekend or week-long deal cycles.
There are two reasons for this:
- retailers must get creative with their unsold inventory and, for many, that means providing discounts or sales that they typically wouldn’t consider; and
- challenges in the supply chain and with on-time delivery are causing retailers to encourage earlier shopping ahead of key gifting dates (e.g., Mother’s Day, Father’s Day, etc.).
Retailers will need to come up with creative deals, such as those tied to exclusivity or timely discounts on specific categories, to provide consumers with more return on their investments and to mitigate potential disruptions due to environmental factors. As trends like seasonality get pushed aside in the new normal, retailers in 2021 will need to be nimble in changing plans and providing longer-than-usual deal cycles with a larger value in order to meet customer expectations.
3. Affiliate Marketing: The Key to Customer Centricity
Shifts in consumer behavior were as dramatic as we’ve ever seen them in 2020, but one thing has remained constant: customer centricity should be core to any retail campaign. As retailers are now forced to throw their historical plans out the window, they'll need to start adapting to what customers are looking for, how they prefer to shop, and where they choose to transact in order to overcome their competition.
Affiliate marketing will be key to retailers in the coming year, as the channel allows for enhanced personalization. For example, some affiliate publishers, such as influencers and content sites, have the ability to focus on a specific product, providing subject matter expertise and targeted insight into a brand’s product space. Similarly, retailers can work with loyalty and offer sites to use customer signals when building audience segments for a more personalized experience.
Unpredictability remains as the overarching theme of retail in 2021. With these three predictions, retailers can start building out flexible plans to meet consumer needs, satisfy inventory demands, and achieve their business goals.
Mike Chin is the senior vice president of client services for Rakuten Advertising, managing affiliate and performance solutions with a focus on the U.S. retail sector.
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Mike Chin is the Senior Vice President of Client Services for Rakuten Advertising, managing affiliate and performance solutions with a focus on the US retail sector. Prior to joining Rakuten Advertising, Chin advanced through multiple roles over a nine-year tenure at Macy’s, culminating in his role as Group Vice President of Digital Media. In addition to leading affiliate, paid search, SEO, display, and social media at Macy’s, he also launched the company’s first retail media offerings in the form of both sponsored products and onsite display. Before Macy’s, Chin served in a variety of roles at a competitive affiliate network on both the advertiser side and on the publisher side.