Smarter Shoppers Call for Better Deals and Authenticity for Retailers in the New Year
Retailers are continuing to face more challenges and shifts within consumer behavior. Supply chain and logistic woes are plaguing retailer inventory, the COVID-19 pandemic is still surging across the U.S. — with the rise of new variants forcing some consumers to shop entirely online, while others are getting back their comfort with shopping in-store.
As a result, paired with the natural evolution of e-commerce, people are doing their homework to find the best deals available.
It's important for retailers to think ahead. In a landscape that's increasingly volatile, retailers need to prepare for what can help drive success far beyond the rush of the holiday season. These trends are going to be a key indicator for the kind of long-term shifts that retailers can expect.
Supply Chain Woes Will Continue
We’re going to see inventory issues continue to expand in 2022 and beyond until the supply chain can catch up with demand. Retailers are going to continue to go out of stock on certain items and then periodically receive big deliveries that they’ll be tasked with offloading.
They're going to need to find creative ways to stay in conversation with shoppers to let them know what products are in stock, and when. While it's a challenge for retailers to navigate, it provides them with an opportunity to get more customers to opt into loyalty or email programs so that they receive real-time stock updates on the products that they want.
Retailers should also invest in targeted cash-back as a way to offload extra stock when those large deliveries come in. Especially now, after the holidays when customers aren’t expecting huge discounts, targeted cash-back will give retailers a strategy that will help them stand out and own share of wallet
Stack Up the Incentives
The long-term financial impact of the pandemic on consumer wallets has turned a larger majority of consumers into “smart shoppers.” These shoppers are looking for the best deals available and prioritize value over all else — even long-term loyalty. Therefore, retailers will need to rethink their marketing priorities. While long-term loyalty is still undoubtedly important, merchants will need to also invest in strategies that attract the eyes of consumers whose loyalty can be swayed — if the price is right.
With that said, simple discounts won’t be enough to earn that share of wallet. Discount prices and one-off incentives are becoming more and more competitive, and marketers who can package together these different strategies to deliver an offer that's truly unique will come out on top. Furthermore, leveraging a combination of first-, second- and third-party data will be crucial to identifying and investing in the most relevant offers for the right shoppers.
Investing in cash-back, for example, is a great strategy for marketers to pull the eyes of new shoppers. But if a marketer is able to go a step further and leverage data to identify a shopper who often uses buy-now-pay-later (BNPL) services, for example, they might be able to pair a high cash-back rate with BNPL and buy online, pick up in-store (BOPIS) offerings — turning that intriguing incentive into a full package that competitors will struggle to beat.
Going forward, retailers will continue to get creative with their rewards and incentive strategies in hopes to pull the eyes and wallets of shoppers who are getting smarter and savvier across the board.
Investing in Discovery
As the e-commerce space becomes increasingly competitive and saturated, consumers have more options for where to shop than ever before. Even with big tentpole events like Amazon Prime Day, more and more merchants are hosting competing events that consumers can pick and choose between. It’s important that these merchants invest in strategies that promote discovery and ensure that their products, deals and incentives throughout the year are top-of-mind for consumers — whether they’ve purchased from or even heard of their brand before.
Marketers will shift their budget spending to invest in discovery by leaning more into strategies like affiliate that are proven to deliver both top- and bottom-funnel results. The authenticity of an affiliate link, paired with stacked deals and incentives, will help merchants drive conversions during key shopping events throughout the year. Outside of those events, advancements in attribution and commissioning capabilities within affiliate make the channel an important strategy for marketers year-round. While marketers can benefit from the performance of affiliate during big shopping events and seasons, they also will benefit from the prospecting and larger brand awareness benefits as we're now able to understand how an affiliate link plays into the overall customer journey, even if it doesn’t serve as the last click to purchase.
Merging the Two With Personalization
Just as consumers are expecting better deals and more options at their fingertips, they’re also expecting more authentic ad experiences — and with that demand for authenticity comes a need for investments in personalization.
Retailers can merge their strategies around deals and incentives with that prioritization of discovery in ways that are personalized and hypertargeted. For example, a merchant can target individual consumers with specific deals and incentives based on the merchant’s own CRM data and publisher first-party data by way of affiliate links.
Think about an athleisure brand, for example. A first-time buyer from this brand can be served an affiliate link with a unique cash-back rate that's more likely to incentivize someone who hasn’t purchased there before. On the other hand, a previously loyal customer who hasn’t shopped with a retailer for six months can be offered a higher cash-back rate to incentivize them to return. It’s a great strategy to ensure loyal shoppers remain loyal and don’t lose intertest in the brand. On the other hand, that same brand can serve an affiliate link to a frequent buyer with a lower cash-back rate and still drive the purchase on that same product.
These types of publisher and retailer partnerships will provide brands with the opportunity to create the most relevant, rewarding experiences for consumers. The eventual deprecation of third-party cookies aside, the future of data usage is moving toward an opt-in model — and these first-party data relationships are vital for the future of marketing.
By understanding who a merchant is reaching on an individual level, they can now deliver authentic affiliate-driven ad experiences with optimized rewards incentives that are proven to drive results. We’re going to see more and more marketers continue to invest in personalization in general. This will not only help them attract more buyers, but also optimize their incentive strategies so that they’re not leaving money on the table.
The new year is here, and retailers that aren’t planning ahead will undoubtedly fall behind. With that said, we live and work in an environment that's increasingly volatile. As consumer habits continue to shift, and as technology continues to advance, marketers will need to stay on their toes and be ready to switch up their strategies in real time. These trends will remain crucial to success — deals, discovery and authenticity. How merchants go about flexing their creative muscles and deliver against these needs will ultimately dictate who comes out on top.
Julie Van Ullen is managing director and head of revenue for Rakuten Rewards, a cash-back and shopping rewards company. She leads commercial strategy and oversees the success and growth of the company’s 3,500-plus advertiser partners.
Related story: A Marketer’s Guide to the New E-Commerce World Order