What Does the Rest of 2021 Have in Store for Retailers?
Leading into the year, I shared three predictions for 2021 with retail marketers. Here’s a quick recap:
- Retailers will need to rethink traditional calendars.
- Brands will continue to offer deals for longer periods of time to improve revenue.
- Retailers will need to leverage affiliate marketing as the key to customer centricity.
After a year as uncertain as 2020, I’m not surprised to tell you that some of my predictions came true (like rethinking traditional calendars, for example — Rakuten’s recent back-to-school survey revealed almost 20 percent of shoppers started in June or before) while others have been reframed.
Given some of the changes we’ve seen, I wanted to reset these predictions with one thing in mind: the rest of the year will be a critical time for brands to maintain and build mindshare with consumers. Now, in the second half of 2021, here are the top shifts that will carry on through the year and what retail marketers may need to adjust.
After Being Spending Deprived, Consumers Are 'Revenge Shopping'
Consumers are ready to spend to refresh their wardrobes, take trips and buy luxury items. Take the boom in the travel industry. May, for example, was a massive month of travel booking with a record number of transactions. Rakuten Intelligence saw vacation rentals on sites like Airbnb and VRBO up 50 percent. The situation is similar at department stores, which saw extreme year-over-year growth with a 74.6 percent increase in orders from 2020 to 2021 for the month of April, according to Rakuten Intelligence.
Consumers are ready and eager to spend, and can be encouraged to upgrade their purchases with the right incentives. Consider this: During Rakuten’s Big Give week in May, luxury items boasted an 86 percent sales lift over non-luxury items. With this success in mind, to incentivize luxury purchases, merchants may consider promotions to encourage buying both in-store and online. Given the growth we’re seeing in industries like retail and travel, now is the time to capitalize on consumers’ desire to spend and meet them with personalized deals and incentives to drive conversion for your brand.
Shortages Are Driving Price Hikes, the Need for Short-Term Wins
Across several different industries, product and material shortages are leading to increased prices across the board. These supply chain issues have been occurring for over a year across industries — from cars and luxury goods to fitness equipment and home appliances. As a result, prices for consumer goods saw a 5.4 percent year-over-year increase in the month of June, and with the Delta variant surging across the U.S., that trend is likely to continue.
As brands consider ways to mitigate future shortages, consumers are bracing for further inflation. Marketers will need to balance strategies that drive short-term value as well as long-term goals. Strategies like affiliate marketing will help drive those short-term conversions, while promoting deals through display, social and search will keep your brand top of mind while incentivizing shoppers to spend.
Consumers Are Shopping in New Ways, But They’re Excited to Return to Stores
The pandemic lent itself to rapid innovation in retail. Today, retail livestreams are starting to gain momentum as a post-pandemic shopping trend, and Instagram and TikTok are identifying ways to monetize their platforms as e-commerce destinations. While consumers are finding several new ways to shop, the return to in-store will be significant for retailers this year. This summer, 89 percent of parents expect to do at least some shopping in-store for the back-to-school season.
For brands, affiliate and display marketing present an opportunity to drive awareness and keep consumers engaged and purchasing. These strategies allow retailers to track the impact of online advertisements on in-store shopping.
What’s more, card-linked offers, like offering cash back online and applying that deal in-store, as well as buy online, pick up in-store, encourage consumers to return to the store, where they may be inspired to make additional purchases they wouldn’t have online. Parents even cited cash back as their No. 1 incentive to shop in-store this season in Rakuten’s back-to-school survey.
Performance Will Drive Marketing Strategies in the Post-Pandemic Landscape
Maximizing return and protecting cashflow were priorities for retailers during the pandemic, and they continue to be priorities as customer expectations have bounced back faster than supply chains, inventories and staffing can keep up. While brand budgets are opening up and mindshare is there for the taking, the need to protect return and ensure profitability keeps the emphasis squarely on performance. Meeting the right customers in the right place at the right time through strategies like personalized targeting and affiliate is a cost-effective, performance-based way to get in front of both new and existing customers.
As we navigate the rest of 2021, we’re sure to see more change. By keeping customers at the center and integrating these trends into your marketing strategy, your brand will be well positioned to come out on top.
Mike Chin is the senior vice president of client services for Rakuten Advertising, and leads the support of affiliate and performance solutions clients with a focus on the US retail sector.
Related story: 3 Predictions for Retail Marketers in 2021
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.