After the past eight months of ups and downs, here are my first thoughts on how you can maximise what should be a bumper online festive season.
If you’re still gathering insights to inform your Christmas marketing strategy here’s one: all Ocado’s Christmas delivery slots were fully booked, ten weeks in advance. Blimey!
Even though at the time of writing we’re just starting Lockdown 2.0 I believe this should be a bumper e-Christmas, and below I highlight some of the many indicators which seem to support this, along with some other considerations which I hope will help you benefit from an uptick in consumer spending amidst a generally gloomy outlook.
And if you are planning to make the most of peak this year, it’s not too late to create that extra special campaign. Here at Wax/On we’ve helped our clients react swiftly to the opportunities and challenges and have recently created a wide range of campaigns from TV to paid social and everything in between. Get in touch and we’ll send you the case histories.
Back to Ocado, and that little behavioural nugget probably speaks volumes about middle-class United Kingdom right now: disappointment and despondency that we probably won’t be able to be with our wider families at Christmas and therefore a reluctance to do a lot of cooking and instead getting Ocado and M&S to do it for us; not wanting to get caught up in last-minute December (hopefully) high street social distancing and queueing; and more. But what does it tell us about retailing this holiday season? Is it, as many have been predicting, a sign that peak 2020 will be the e-commerce Christmas?
Earlier statistics had hinted at this: between April and June 30% of all retail was online. Around the same time retail shopping apps were the most downloaded ones. 53% of consumers say they are going to avoid shopping in person this Christmas. And sadly a record number of shops disappeared from the high street in the first half of 2020: a total of 11,120 chain store outlets closed between January and June. In total there were 6,001 net store closures. And Enders Analysis estimated we had experienced four years’ worth of digital acceleration within the first three months of lockdown.
In this context, here are some important insight-driven e-marketing considerations as we approach peak.
Is the Ocado effect a sign that Christmas is coming earlier? Probably: over a third of UK consumers (36%) have said they will start Christmas shopping earlier this year.
This may be obvious, but its importance has been heightened by recent events. Consumer disposable income has decreased by an average of 4% over the past two months. And the UK unemployment rate has risen to its highest level in over three years, now at 4.5% in the three months to August 2020, compared with 4.1% in the previous quarter. Redundancies have risen to their highest level since 2009. Overall employment is down about half a million since the pandemic began. 41% of consumers have said they will spend less on gifts this Christmas. Of course individual demographic groups will be more affected than others.
DON’T RELY ON LOYALTY. AND WELCOME NEW CUSTOMERS.
48% of adults say they are already spending more time shopping around for the best deal (up 12% since May) so don’t take loyal custom for granted: you may need to work harder to get repeat business. Meanwhile you should ensure that the experience for customers coming to you for the first time is exemplary. They will undoubtedly be busy visiting multiple sites and quickly comparing experiences, so how can you ensure yours is the best and stickiest as we used to say?
RE-CONSIDER BLACK FRIDAY AND CYBER MONDAY ACTIVITY
In a recent survey of e-commerce businesses in the US and UK, 33% said they were opting out of Black Friday and Cyber Monday promotional activity this year, versus 6% in 2019. Here in the UK, 84% of Which? members surveyed said that they were not planning on buying anything in the Black Friday sales. Which? had tracked the prices of 220 home and tech products advertised as “Black Friday Deals” in 2019 across Amazon, AO.com, Argos, Currys, PC World, and John Lewis for six months before and after the event. They warned their readers that 85% of the products were the same price or cheaper at other times of the year. And Techradar reported that they were seeing fewer Black Friday deals hitting the metaphorical shelves this year, compared to the US.
BE PURPOSEFUL, AUTHENTIC AND CARING
We’ve been distanced from some of our loved ones and friends for over six months. To compensate for this we will probably want to put more thought and emotion into our gifting this year. That means consumers will care less about the perceived value of a gift and instead care much more about what a gift says about our relationship and our connection. This is an opportunity to give a little more prominence to your brand’s Purpose. It won’t be a primary driver of sales but as it looks like consumers are shopping around more this year, your Purpose could tip the scales in your favour when they make their final purchase decision. Tell your authentic story, and partner with like-minded brands and organisations that share your values. Beyond COVID Deloitte remind us that Purpose-driven companies win more market share and on average grow three times faster than their competitors, all while achieving higher customer and employee satisfaction.
On a similar note there’s evidence to suggest that you should really dial up the celebratory tone of your marketing this Christmas to resonate with your target audience. 43% of UK consumers think this Christmas will be more important than ever, and as we face the prospect of remaining apart from the majority of our family that makes sense. What can you do to give the sense of bringing your customers closer to their loved ones?
TAKE ADVANTAGE OF THE LIPSTICK EFFECT
Consumer behaviour known as “the lipstick effect” was identified first in the beauty industry when shoppers felt the need to treat themselves a little in tough times. Leonard Lauder of Estée Lauder first coined the term back in 1981, when he noted that his company’s lipstick sales were inversely correlated to the economic cycle.
This Christmas we should expect to see more of this as lockdown weary consumers feel the need to treat themselves at the same time as buying gifts for loved ones. How can you bundle up your products and services into value packages to take advantage of this opportunity, subtly showing that part of the bundle could be for the person giving the gift?
Once shops reopen the physical shopping that does take place this peak is much more likely to be done locally rather than in larger town and city centres, in fact 46% of consumers have said they will shop locally this Christmas. And 57% of people said that once restrictions were lifted, they were more likely to spend money at a business that offers locally produced products than they would have done before. So if you only have an online presence you can share this mentality by stressing your own community engagement, and if you’re a larger organisation trading online and offline then you should be promoting your Click and Collect options.
THINK ABOUT OLDER CONSUMERS ONLINE
If your brand is favoured by older consumers, then you should already have seen more of them move online simply because lockdown has dramatically accelerated their digital adoption. In July, researchers Mintel found that 43% of over 65s had shopped more online since the start of the crisis. Think about this age group as a specific audience in terms of their unique needs and ensure their customer journey and user experience is an effortless one.
PROMOTE YOUR SHOPPING APP
As mentioned earlier amidst a massive shift online, shopping apps were the most downloaded early in the pandemic. According to Google 38% of UK consumers now regularly use shopping apps, and they are 37% more loyal than non app customers of the same retailer. And of course if you don’t yet have an app, now maybe is the time to get one.
AND DON’T FORGET THE HYGIENE FACTORS
With greater emphasis online this season getting the basics right will be even more important: it’s time to redouble our efforts on inventory management, delivery, and returns. Use your CRM and social to ensure customers and prospects know exactly when you can guarantee delivery in time for Christmas. And remind everyone how easy it is for you and your loved ones to exchange and return items after the holidays. These are some of the factors that will ensure you are chosen over your competitors.
HAVE A HEALTHY, HAPPY AND PROSPEROUS TIME.
I do hope peak 2020 is a successful one for you. Above all I hope the holidays bring us together – in whatever ways we can find. So here’s wishing you a healthy, happy and prosperous festive season and beyond.
THINK WITH GOOGLE