We Learned in 2020, Let’s Execute in 2021
To say 2020 has been one heck of a year is an understatement. From the pandemic, lockdowns and retail stores filing for bankruptcy, the advertising industry took a major hit this year. Before the COVID-19 outbreak, global advertising investment was estimated to grow 7.1 percent in 2020. Now, it's estimated to see a brutal contraction of 8.1 percent — equating to almost $50 billion — as a result of changing consumer behavior. Getting the right message across during a global pandemic had its challenges, which some companies overcame successfully and others not so much. So, how can retailers effectively tackle the new year with the challenges seen in 2020, learning from the mistakes they made this year?
If you follow these simple tips you’ll be one step closer to attracting your audience:
Learn to Quickly Adapt to Changing Consumer Preferences and Behaviors
Every retail sector, from apparel to groceries, has seen a rapid uptick in e-commerce, a trend that's likely to continue into 2021 given the uncertainty surrounding a COVID vaccine, as well as more people becoming accustomed to the efficiency of online shopping and curbside pickup. However, shifting your focus towards e-commerce is just the tip of the iceberg. Start investing in technology that can teach you more about your individual customers; as more granular trends emerge, you’ll be equipped with the knowledge you need to make decisions that build better outcomes for you and your customers.
Personalization Moves From Desire to Necessity
Different markets require different messaging to accommodate consumer interaction amidst pandemic setbacks. The pandemic proved that location is key, as ads in New York didn't work in Florida or California, where cases of COVID continued to rise. When you have less touchpoints to reach consumers, and their media intake threshold is at an all-time high, they tend to lean towards brand loyalty, strengthening barriers to connect with and capture new customers. Time, context and location are crucial components to a successful advertising campaign.
The Death of the Cookie Will Challenge Everyone’s Approach to Data
Advertisers are gearing up for a cookie-less future. Those that are overly reliant on third-party cookies will also begin to crumble. Highly accurate and rich data sets will be attainable, but only for savvy marketers who know how to integrate multiple data sources with their own first-party data. Smart advertisers will tighten the reins on their media strategies, and look to maximize every dollar spent through technologies that are just as robust with their data enrichment and learning engines as they are with campaign performance. The growing adoption of data enrichment technology will give rise to customer data platforms (CDPs).
Invest in Loyalty and Longevity
As we saw at the beginning of the pandemic, consumers were stocking up on office supplies, and sales skyrocketed, but now the demand for laptops and printers is being replaced with Pelotons and home workout subscriptions. After the rush is over, how will these brands lock in their customers for the long term? Additionally, throughout 2021, travel will be seen as a luxury. Less passengers, less flights, less capacity, and more sanitation requirements, are all factors that could potentially impact the cost of a ticket that needs to support new overhead costs and smaller margins. In the year ahead, it will be crucial to advertise to and acquire new audiences, while increasing the value you bring to your existing customers.
Pay Attention to Emerging Channels
According to a recent study by the IAB, the number of companies that plan to commit 50 percent of their TV budget to CTV is set to double over the next two years. The advertising industry is still figuring out how to navigate this space, and new players are emerging by the day; however, it’s obvious that advertisers that neglect this area of growth could be leaving potentially millions on the table. Eventually, the issues we see today with measurement, integrations and a lack of formats that accommodate lower funnel/direct response campaigns will be sorted out. Be ready for it.
Although challenging, 2021 will open the door for marketers, and allows for retailers to expand into new avenues and showcase different sides to their business models. Don’t be scared of the unknown economic climate. Follow the trends and, most importantly, your audience, and your campaign can come out on top.
Oz Etzioni is CEO of Clinch, an AI-powered omnichannel personalization technology platform.