Proof
Points
Latest October retail sales data from the U.S. Department of Commerce, Census Bureau, indicated that some key retails areas experienced a decline while online retail rose slightly from the prior month. While two large pharmaceutical companies have just announced promising COVID-19 vaccines, consumers are still bracing for a virus surge for the holiday season which means greater online sales and less foot traffic to brick-and-mortar outlets.
The latest November retail sales data from the U.S. Department of Commerce, Census Bureau, indicated that some key retails areas are experiencing a decline despite holiday spending. Consumers are largely staying home amid a virus surge this holiday season, which translates to greater online sales and less foot traffic to brick-and-mortar outlets.
Latest October retail sales data from the U.S. Department of Commerce, Census Bureau, indicated that some key retails areas experienced a decline while online retail rose slightly from the prior month. While two large pharmaceutical companies have just announced promising COVID-19 vaccines, consumers are still bracing for a virus surge for the holiday season which means greater online sales and less foot traffic to brick-and-mortar outlets.
Whether you’re a brand manager, a marketing director, or a retail business owner, one of your challenges is probably growing sales, especially today. The good news is that we can see from the latest Advanced Monthly Retail Sales Report (see recap below) that sales are starting to rebound. However, depending on your unique situation, your sales might not be rebounding as quickly as you would like. To turbo-charge growth at scale, the following provides a roadmap including tactics you can employ to improve your retail sales while also strengthening your brand’s experience and exceeding your customer’s expectations.
The key to driving retail sales is to ensure that you are effectively engaging with your customers throughout their journey. Below is a three-step roadmap with key tactics to employ for connecting with your customers at various points during the journey.
Remember that in today’s environment, your customers are expecting your brand experience to match, whether online or offline.
According to a Harvard Business Review paper, creating a personalized experience for the consumer can increase sales 5 to 15%.
However, in order to enjoy this type of jump, you will need to define, align, and measure your customer’s experience along each touchpoint in their purchasing journey. Let’s take a look at the three-step roadmap which shows this in action:
To build awareness online, you can use display and video targeted at a broad audience. For offline brand awareness, you can use media placements in print, out-of-home, radio, and TV. At the start of the journey, personalization is minimal. This allows to you to reach as many potential customers as possible, while still having some flexibility on your target audience, e.g. out-of-home placed in specified geographical locations and digital characteristics like age, gender, location, and affinity.
Checklist:
Be sure to have a website that is eCommerce-enabled. This includes a mobile app, if applicable
Create a content strategy for social media and as well for your blog. Your blog will help deliver potential customers to you organically from search engines
Lay the groundwork for a Customer Data Platform (CDP) that will help organize your customer data from emails, social media, your website and your CRM. A properly executed CDP can increase sales by 15 to 20%
Choose an email marketing automation system to help send your brand message to potential customers
To help your customer, you need to give them the right information at the right time. Specifically, this means having content that informs your customer in the format that they like. Create content that resonates, such as in-store video displays that demonstrate the versatility of your product or how to use it. Or on your website, you could have illustrations for how to use your product, instilling confidence in your customer that they are making the right purchase.
When the customer is at your store or website, make it easy for them to comparison shop, with your comparable products as well as your competition. Rest assured, your potential customer is already aware of what the alternatives are to your product. With that in mind, you have an opportunity to draw direct comparisons on your website of the benefits of your product compared to your competitors.
Checklist:
In-store, have digital displays that can help educate your customers. Likewise, feature similar video content on your website
Allow potential customers to join your email list to receive the latest updates
Monitor popular content on your website and promote it
Develop a personalized customer experience using data from your CDP to send the right messages to your potential customers, e.g. personalized emails and ads based on their engagement with your brand
A customer data platform (CDP) is an application that unites your customer data interactions into customer profiles for a holistic view of your customer and your brand’s interaction with them.
Once the customer has reached the point of purchase, you need to make the process as seamless as possible. Additionally, this is an opportunity to deepen the relationship with the customer. Apart from your in-store POS being up-to-date and able to accept any type of payment that your customer wants to make, you should allow your customer to further engage with you. For example, allow the customer to be able to have their receipt emailed to them along with other engagement activities, e.g. initiate a return, receive customer service and locate the closest store. For online customers, give them an opportunity to create a profile where their payment information can be stored safely and used again on the next purchase.
Checklist:
Provide order online and curb-side pick-up
Use omni-channel campaigns to engage one-on-one with your customers
Give your associates tablets that allow them to assist the customer without having to return to a traditional POS register
As noted earlier, disruption has caused some retailers to rethink and quickly retool their strategy. The latest data from the Census Bureau’s Advanced Monthly Retail Sales in July gives some insight into how different retailers are performing and gives you the opportunity to compare yourself against your peers. Read on for our retail sales insights for key categories.
Nonstore Retailers
Nonstore retailer sales in July continued to slow down from the April spike. The latest McKinsey survey now shows the approximately 15-45% growth in online shopping across multiple retail categories should continue beyond the crisis.
General Merchandise Stores
Positive growth for this retail sector has stopped monetarily when compared to the previous month, with a -0.2% change in July
While consumers still appear to be cautious on non-essential purchases, the most recent survey data shows this is starting to improve.
Retail Trade
Overall consumer retail spending slowed its growth in July to a 0.8% increase compared to the prior month, and far from its 16.8% record increase in May.
While consumers are still using curb-side pick-up, the McKinsey survey showed that customers who shop in-store are now showing a preference for self-checkout.
Department Stores
As the summer comes to end, department stores and malls are seeing sales that remain flat. Compared to June, department store sales were relatively unchanged at 0.1% growth.
However, according to the McKinsey survey, consumers showed a strong preference for department stores and retail stores who offer the ability the purchase online and pick-up at the store. 65% of consumers who used this option said they intend to continue using it.
Grocery Stores
After the initial spike in March, grocery stores are still benefiting from consumer demand. The latest sales numbers for July, although slowing, showed another positive increase at 0.4%.
According to the McKinsey survey, 53% of consumers who are using grocery delivery services plan to continue after the pandemic has passed.
Food Services and Drinking Places
Though not as strong as May and June, restaurants and bars experienced another increase at 5% for July.
Google Trends data still shows that there is demand for dining in a restaurant. In the past 90 days, the data shows that the search phrase “restaurants open for dine in” experienced a 650% increase.
The Stratistry team loves nothing more than digging deep into available data and research to derive actionable insights that can help lead your brand to achieve better business results. Contact us to find out how we can combine the art and science of marketing for your brand.
Sources:
U.S. Department of Commerce, Census Bureau Advanced Monthly Retail Trade Report 8/14/2020
Matt Ariker, Jason Heller, Alejandro Diaz, and Jesko Perrey, “How marketers can personalize at scale,” Harvard Business Review, November 23, 2015
Julien Boudet, Brian Gregg, Jason Heller, and Caroline Tufft, “The heartbeat of modern marketing: Data activation and personalization”, McKinsey & Company, March 22, 2017
Tamara Charm, Shruti Bhargava, Resil Das, Anne Grimmelt, Eunice Kim, Kelsey Robinson, Salvador Tormo, “US consumer sentiment during the coronavirus crisis”, McKinsey & Company, survey 8/7/2020
“Nearly 80% of Millennials said that once the pandemic eases, they plan to make more effort to buy products and services from smaller, local businesses to help them stay in business.”
Brands and retailers can breathe a small sigh of relief. After a record decline in the first quarter of this year, overall U.S. consumer sentiment remained fairly steady between April and May, increasing only slightly to 72.3 combined. So, things are looking a little better. But while the relief checks and unemployment payments have helped stem the overall economic hardship caused by the Coronavirus, they have not been able to fully stimulate the discretionary spending that will be needed to completely pull us out of this crisis. Ninety-five percent of consumers say that our economy is currently in recession, and there is still uncertainty about future job and income prospects, especially among lower income and younger households.
Interestingly, when broken out by age, both Gen Xers and Millennials outlook improved in May while Baby Boomers fell further regarding their planned spending and the overall economy. As it relates to Millennials, the 2020 Deloitte Global Millennial Survey was released last week and further supported the resilience and upbeat nature of Millennials, despite the Coronavirus. Truth be told, they had expressed tremendous daily stress and anxiety pre-pandemic. However, the pandemic has actually stimulated greater optimism and decreased stress levels among this audience. They say that this is attributable to less working hours, less hectic shopping and mass consumerism and the lack of stressful commutes during the lockdown compared to their pre-pandemic lives.
There’s no doubt that Millennials have been hit hard by the Coronavirus. A quarter of younger Millennials (25-30 years old) either lost their jobs or were placed on temporary, unpaid leave. And only 1/3 of Millennials say that their employment status has been unaffected by the pandemic. With that said, Millennials are already thinking forward to how they will wield their significant buying power coming out of the pandemic.
For one thing, nearly 80% of Millennials said that once the pandemic eases, they plan to make more effort to buy products and services from smaller, local businesses to help them stay in business. And when it comes to larger businesses, 60% say they plan to buy more products and services from those who have taken care of their workforces and positively affected society during the pandemic. They have never had reservations about stopping business relationships when brands don’t meet their high expectations of doing good overall, conserving the environment, protecting their personal data and equitably rewarding employees.
What does this mean for you? Well, Millennials are one of the largest generations in history, and are positioned to reshape the future of our economy. In fact, the Deloitte study reported their desire to lead this change. And as they change the way they buy, it will force companies and brands to change how they do business as well. Brands should be prepared for more transparency and integrity. In short, Millennials are poised to make them more accountable with their expectation for authentic leadership.
The Stratistry team can help you rise to the occasion. We love digging into the latest data and research to derive actionable insights that can help lead your brand to achieve better business results. Contact us to find out how we can combine the art and science of marketing for your brand.
Data References:
University of Michigan, Survey of Consumers, Consumer Sentiment Index, 6/26/2020; 2020 Deloitte Global Millennial Survey
“You’ve got to know when to hold ‘em
Know when to fold ‘em
Know when to walk away
And know when to run
You never count your money
When you’re sittin’ at the table
There’ll be time enough for countin’
When the dealin’s done””
As many of us shelter in place at home and worry that a recession is almost sure to come next, our first inclination might be to fold our marketing cards and walk away. But I can point to scores of research that actually proves the importance of a continued marketing effort during an economic downturn (see a sampling of links with more data at the end of this article). While it is natural for companies to regroup and take a closer look at all of their expenses and overhead at times like these, it is also imperative to consider the long-term ROI that can be achieved through your various expenditures. As you evaluate your marketing efforts, I recommend that you keep the following thoughts in mind.
A popular adage says, “When times are good you should advertise. When times are bad, you MUST advertise.” Rather than viewing marketing as an expense to be cut during a downturn, it should be viewed as an investment. Staying in front of your customer keeps you top of mind and gives your customers the reassurance they are looking for from known brands.
Research about the impact of advertising during a recession started with the Great Depression. Roland Vaile published his perspective in the Harvard Business Review in April 1927. He found that companies that increased their ad budgets during the recession grew sales much faster than their rivals, both during and after the downturn. But companies that decreased their advertising spend saw sales decline both during the recession as well as the following three years. Since then, there have been dozens of other studies to reinforce these findings. All of them found that companies who maintained a higher level of marketing during a downturn not only survived it, but came out in a stronger, more profitable position in the upswing.
By continuing to market proactively when others are cutting back, you’ll be gaining a competitive advantage. Because some companies simply don’t have the fortitude to continue marketing, this means that your marketing dollars will go farther and be fighting against less clutter. And when the market rebounds, your competitors will ultimately be caught playing ‘catch up’ and will be frantically trying to increase their marketing spend when everyone else is too.
The benefit of staying present and top of mind will compound over time, making your brand even stronger in the eyes of your customers. Not only will you stay ahead of your competition, but you’ll be better positioned when conditions improve. In other words, proactive marketing during a recession really pays off.
Some proof behind this Proof Point:
https://www.marketingweek.com/mark-ritson-marketing-spend-recession-coronavirus/
Check out Part I of this blog series to learn how your brand needs to shift due to the Coronavirus.
If you weren’t prepared for COVID-19, you’re certainly not the only one. And managing your brand in the midst of this crisis will take a mix of patience and flexibility. If handled appropriately, there is a definite opportunity to rise to the occasion and have a measurable impact. The following provides our thoughts for how your brand needs to pivot to achieve this kind of impact.
It’s safe to say that you, your brand and/or your company likely feel under fire. Consumers are nervous, and may be quick to harshly judge any entity that they feel is trying to profit off this pandemic. Because it’s important to ensure that your message carries the right tone, we offer a few observations for your consideration as you plan your ongoing messaging and content strategy during this time:
Be transparent. Customers are looking for authentic leadership from the brands and companies that they care about.
Be empathetic. They want reassurance that you care about them and are taking the right steps to address this crisis, from implementing new cleaning procedures to waiving change and cancellation fees to updating your products or services. And don’t forget your employees. They are not only the front line of your brand, but customers will want to know that you care about their safety and well-being too. We’re all in this together, and brands need to react accordingly.
Avoid the hard sell. Now is the time to provide them with more value. Consider how their needs have shifted and how your message could reflect that. Is there a deeper brand story that you can share now that they actually have more time to engage with it? Or can you entertain them during this stressful time with a quiz, game or contest?
Unless you simply have no other choice (or your brand happens to be Purell), now is not the time to go dark with your communications or marketing spend – we’ll share more about this in our blog post next week. In the meantime, however, we can say that it does make sense to re-evaluate your paid advertising plans and media selection. Your channel mix and ad spend likely need to shift to accommodate the evolving consumer behaviors caused by this pandemic.
For example, a March 2020 GWI survey showed that 39% of US consumers say they are reading the news more frequently, while 29% say they are checking social media more frequently. And 28% say they are shopping more online in light of the virus. The folks at Russell Research are also keeping an eye on these changing media consumption habits. They recently shared the following relevant results from their ongoing COVID-19 Monitor:
Russell Research in a March 2020 survey showed that Digital and TV have increased attention while podcast attention declined.
As we all shelter in place, it appears that our massive decline in commuting is negatively impacting podcast listening, while TV and web attention have increased. As the situation continues to evolve, you should also be monitoring for any change in consumer behavior on the ads you are running. And keep in mind that you may need to pause the ads, shift your budget or even revise the creative based on the response you see.
Invention is often born from necessity. Restaurants have arguably been one of the hardest hit business segments due to the Coronavirus. As they navigate the need to shift to a fully takeout and delivery model, they have also found new ways to shift their product and service offerings to better meet the needs of their customers (and to ultimately stay afloat):
Pre-packed quarantine staples – Restaurants are offering a variety of items from coveted fresh produce to in-demand non-perishables like toilet paper
Freezer foods – From bread dough to soups to individual servings of signature dishes, restaurants are filling the gap that consumers have found in empty grocery store aisles
Take-and-bake family style – Consumers are looking for easy ways to feed their families, and restaurants are answering with a variety of take-and-bake family style dishes
This kind of innovation should be carried to other business categories as well. Brands should be asking how their customers can use their current products or services in a new way. For example, a food manufacturer could share kid-friendly recipes that can be made at home as a family. Or a brand in another category might think of a way that their product or service can serve as a stress reducer or at least a distraction.
Brands like Orange Theory have shifted quickly over the past couple of weeks to bring operations fully digital. They determined that the best way to bring their in-gym interval training to their customers was by developing at-home workouts that utilize commonly found household items and are delivered through their app. Social media sentiment for this brand shift on their part has been wildly enthusiastic. As with these examples, being ready and willing to make these kinds of changes can create connection and community with your customers and brand advocates.
We know that much change is likely to come from the current disruption to our everyday lives. Experts are projecting that new norms and adaptive behaviors will be long-term and far-reaching. But taking the right steps to build your brand and community now will not only help you succeed in the short run – they may just set you up for continued success as well.
Check out Part II of this blog series to learn the importance of marketing in a downturn economy.
