Written by Mike Austin, CEO, Fresh Relevance
Retail is arguably one of the sectors most affected by the global pandemic. The severity of the situation was perhaps exemplified by the news that lockdown has caused sales at Primark to decrease from £650million each month to zero – nothing at all! Bouncing back after a crisis such as this may seem like an insurmountable challenge and although retailers with ecommerce platforms have been somewhat saved by being able to sell online, patterns of spending have altered and almost every consumer-facing business has had to contend with significant adjustments.
But it looks like we may be reaching the end of the tunnel that is lockdown, with the government announcing that bricks and mortar stores will be able to reopen from 15th June – provided social distancing measures are in place and enforced. Yet the question remains as to whether consumers are ready to get back onto the high street. With so much uncertainty still prevailing, we’re headed towards a time characterised by tough economic conditions. Survival will depend on a variety of factors, but a resilient marketing plan is key. With our lives even more ‘digital’ than they were back in 2008 – the last time the UK was faced with similar economic uncertainty – having a healthy digital marketing strategy will be even more crucial for brands at this time.
Let’s recap to what marketing in a recession looks like
When the economy enters a recession, it’s difficult to predict how long it was last or how deep it will go. Although no two downturns are the same, looking back at the lessons of 2008 can provide us with useful insight. Recessions mean tighter purse strings for both consumers and businesses. Consumers typically become stricter with their spending and more conscious of priorities; choosing to forego a regular manicure and pedicure in favour of more practical purchases, for example.
Similar mindsets take hold in businesses, with marketing and communications budgets often among the first to be slashed. But in doing this and failing to put the core customer’s changing needs first, businesses can jeopardise overall performance in the long run. Harvard Business Review summed this up perfectly when they suggested that businesses “take a scalpel to the marketing budget over a cleaver to more nimbly adjust strategies and product offerings in response to changing demands”. Marketing activities need to become smarter to work budgets harder. We may not know how much money consumers will spend moving forward, but thanks to increasing ecommerce sales coupled with data and analytics, we are better able to understand how consumers are spending their money, and how they are navigating the problem of shopping during the crisis.
ROI-rich marketing tactics
Knowing that we need to work smarter, there are several methods that marketers can use to engage shoppers throughout the buying cycle – without having to replace portions of the marketing stack, without any integration hassles and without needed to harness new technical skills. They key point here is to remember that understanding the customer is key and should be at the heart of all tactics employed.
So, for example, we already know that relevant and personalised experiences can boost conversion rates and revenue, but when it comes to new shoppers that visit the site, delivering that same relevant experience can be tricky without the luxury of previous browsing history. In this situation, contextual targeting can be your saviour. Contextual data includes shopper geolocation, the weather in this location, the time of day and the traffic source (Instagram, Google search, Google ads) as well as device they are using. This information can be used to tailor dynamic content and make visitors to the site feel as if the offers, products and content shown has been specifically designed for them. If a shopper has arrived from Instagram for example, the homepage could be designed to provide a dedicated offer for people visiting from Instagram, and if the weather is warm in that location, then the content could evolve to showcase products fit for more sunnier climes.
Similarly, during a recession, identifying and presenting items within the shopper’s desired price level can provide consumers with a more convenient experience. An AI-powered price affinity predictor can predict the shopper’s price point, allowing you to provide highly relevant and targeted experiences for shoppers to new websites from the moment they arrive. Algorithms analyse an individual’s contextual data, such as the traffic source, device, time of day and location. It then compares this to similar people that have gone on to make purchases and allows you to anticipate what a new visitor’s price affinity will be; as such, those product ecommendations that you showcase will selected from within this price range.
For customers that have bought from you in the past, it will be important to ensure that the website and all digital communications that are sent show customers products they are most likely to be interested in, in order to deliver that memorable and helpful experience. During a recession, alongside providing better value for money and a more personalised service, what customers really want is the ability to shop seamlessly and in a way that suits their needs. A convenient shopping experience is a key driver in encouraging active loyalty. Product recommendations based on past purchases, real-time behaviour and future purchase intent ensures that only the most relevant, attention-grabbing products are shown to individual customers at exactly the right moments.
Having less to spend doesn’t always mean having to make sacrifices. Small adaptations and a fine-tuning of strategies will mean brands can do more with the same amount of investment. Making it through difficult times will be about prioritising and investing in the methods proven to work. With the right tools and regular evaluation of the insights available through data, brands should be able to regularly shape and reshape tactics to ensure the best returns. The most successful retailers will be those that can nurture loyal customers and provide a seamless experience for the new. Positive brand encounters will be just as possible with the correct investment in technology and strategy, even during challenging conditions.