There is only one thing that is certain in retail marketing in 2021 — we will meet a new set of unknowns. Alex Czurylo, SVP, group product operations, Rakuten Advertising, shares three takeaways from 2020 that will help retail marketers prepare for an uncertain year.
Since the onset of the pandemic, the old rules of consumer behavior, including shopping preferences and brand loyalty, have shifted repeatedly and quickly. As we enter 2021, retailers are understandably looking for advice on what to expect and how to meet their customers throughout a shopping journey that has drastically changed in the last nine months.
Many retailers saw decreased demand in 2020. The holiday shopping season and the beginning of 2021 are key in gaining back customers and loyalty. And with so many consumers looking to spend online, as demonstrated by the massive growthOpens a new window in ecommerce across 2020, there are bright spots ahead for retail.
Despite some expected uncertainty in 2021, there are a few key takeaways from 2020 that we can apply to retail moving forward.
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1.Unlikely Retail Partnerships Generate Opportunities To Get in Front of New Customers
As a result of lower demand, retailers spent the first half of 2020 looking for ways to reach new audiences. In 2021, retailers can get creative by partnering with other brands, where there is potential overlap in consumer value, to offer their products and services in new spaces and to reach new customers.
Experts have already started seeing these kinds of partnerships. For example, Piedmontese, an online beef retailer, recently partnered with Camp Chef, an outdoor cooking manufacturer, so both could introduce their complementary products to new audiences. Through this partnership, Piedmontese and Camp Chef have had greater brand visibility with customers who are already open to purchasing in their industry. We will continue to see brands get creative in 2021 by searching for tie-ins and co-marketing opportunities to connect with other brands who have audiences with similar attributes.
Additionally, retail marketers can find new ways to partner with publishers, expanding outside of loyalty and coupon networks to content publishers, who have seen massive success in 2020. According to our network, content publishers have seen a YoY click increase of 140%Opens a new window , and they saw double-digit growth during Cyber Week.
2. Click-And-Collect Is Changing the in-Store Shopping Experience
One of the biggest challenges in 2020 was the need to close stores due to stay-at-home orders. Typically, when customers shop in-store, they tend to buy more than just what is on their list. When in-store shopping ceased at the beginning of the pandemic, decreases in in-store shopping made up a large part of revenue losses for retailers in 2020.
Once states started to open back up, buy online and pickup in-store (BOPIS) created a new in-store opportunity for retailers, with almost halfOpens a new window of consumers reporting they would likely use BOPIS this holiday. But with customers limiting their in-store shopping time, retailers need to be creative in how they are selling.
From a marketing perspective, marketers should be ready to promote exclusive in-store experiences, once it is safe to do so, to bring consumers back into the store. To maintain customer satisfaction, inventory data should be integrated into any successful marketing strategy. Paid search campaigns can be especially useful as stores continue to open to provide targeted, up-to-date product level in-stock information, store hours, and cleaning procedures. Additionally, marketers can use personalized affiliate marketing strategies to link online engagement and in-store sales, with dynamic content based on a consumer’s location, store inventory levels, and promotional sensitivity.
3.Travel Budgets Will Be Spent in the Home — Until Mass Vaccination
In 2020, consumer spending shifted away from travel and in-person entertainment to categories including home goods and kitchen appliances. At first, the economic uncertainty around the pandemic caused decreased spend across many categories. But as the year continued, more consumers started looking for items that helped them support a change in lifestyle, including adjustments to working and schooling from home. Consumers turned to goods and services that would make their home lives more comfortable, whether home improvement, cooking and baking, home gyms, or video games.
In fact, since the start of the pandemic, Rakuten Advertising saw the most significant growth in these home categories, with 101% same-store YoY growth in the garden supplies category in its U.S. affiliate network. This was followed by 86% same-store YoY growth in home improvement, 84% same-store YoY growth in housewares/small appliances, and 67% same-store YoY growth in food & drink.
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Until a vaccine can allow for travel and entertainment to reach pre-pandemic levels, retailers can continue to expect a shift in this spend to other categories. Given this, home and comfort brands should dedicate more resources to marketing now to drive customer loyalty. Additionally, travel-focused brands, like car and home rentals, should start preparing now as consumers begin to make plans to travel later this year.
With the vaccine beginning to roll out across the country and the world, all industries will encounter new challenges in 2021. Even so, retailers and digital marketers can look to learnings and best practices from last year that can be applied to 2021 to continue to meet the changing needs of customers.