What Social Distancing Means for Retail Marketers

The past few weeks have been filled with global uncertainty, and the retail industry has been heavily impacted since the national state of emergency was declared on March 13. Despite the recent industry turmoil, Listrak data from the two weeks following the declaration shows that overall e-commerce sales have jumped 31 percent year-over-year, demonstrating a shift to online shopping. However, the growth isn’t spread equally across industries, with toys and sporting good sales rising by 50 percent, while the apparel category falling by 4 percent.

It’s essential for retailers to plan their next steps, adjust to the new landscape, and establish long-term marketing strategies. Right now, retailers need to refine their plans to develop customer loyalty and efficient marketing tactics. Looking ahead, the focus will shift to optimizing conversion rates, focused marketing spend, and continuing to please loyal customers.

Communicating With Customers

COVID-19 initially left companies unsure about how to communicate with customers — trying to strike a balance between thoughtfulness and giving space. Following the initial adjustment, some companies have since leaned into promotions to strategically boost engagement and sales to offset decreases during the national state of emergency.

Retailers must be sensitive to consumer needs during this period by promoting products that will help and support customers in a time of crisis. Lingerie company Hanky Panky successfully implemented promotions around the “new work uniform.” Americans are now working from home, with pajamas becoming everyday office attire. Seeing this shift, Hanky Panky changed its promotions to share options for new work attire, offering comfortable loungewear options.

With thoughtful promotions, apparel companies have started to turn things around and are starting to see a small uptick in sales. Consumers are stressed and anxious, but they'll remember brands that shamelessly promoted goods when it comes time to begin discretionary shopping again. Sensitive communication and thoughtful marketing will build lasting relationships.

Internal Upkeep

It’s no secret that this economic uncertainty has tightened marketing budgets for retail brands. This means leaning into high return on advertising spend (ROAS) channels, such as email and SMS. Closed physical locations leave retailers with fewer internal resources to engage with customers. This also creates pressure to have marketing tools with high conversion rates.

Consumers are on their phones and computers more than ever, making email and SMS the most efficient way to reach them. Retail marketers must prioritize these channels to boost engagement. In fact, many companies have already jumped on this trend, with a 5.7 percent increase in marketing emails being sent in the two weeks since March 13.

Looking Ahead

When the pandemic ends, many retailers will have been hit hard. This makes the second half of the year crucial for getting back on track. Two key steps to increase sales in the smaller window are creating a very targeted marketing spend to reach key audiences, and maintaining engagement and sales efforts with loyal customers.

Marketers won't have extra money to invest in experimental tools, so they should focus their campaigns on proven channels — like email and SMS — to ensure future success.

Finally, retailers can continue to please loyal customers. For apparel brands, this means earning more closet share. Retailers that prioritize brand loyalty over spending will be able to capture this larger share. Marketers should better personalize their email and SMS efforts to continually engage core customers.

COVID-19 has thrown us a lot of curveballs as an industry. Retailers have responded as best as they can, with promotions that highlight relevant products and similar campaigns, but now is the time to think about the long game. What you do now to connect with customers, build brand loyalty and prepare for life afterwards will decide who survives.

Ross Kramer is co-founder and CEO of Listrak, a marketing automation platform for retailers.