A new survey of retailers shows they plan to ramp up their promotions – and do so earlier – for the holidays.
While several recent polls have focused on consumers’ plans for the upcoming season, one new survey focused on retailers’ expectations and concerns about the impending holidays. Research conducted by CommerceNext in partnership with The Commerce Experience Collective (CommX) found that retailers are exhibiting a similar tempered optimism.
The tempered part comes from stubborn inflation and other factors like potential marketing gaps due to privacy regulations. According to the survey of more than 100 retail and brand executives, most retailers anticipate higher sales than in pre-pandemic 2019 but don’t believe they will hit 2021 profit numbers, given how last year was a record-breaking year for many and 2022 has been a year marred by rising prices. Although supply chain concerns were the main issue last year, consumer confidence is outpacing that worry right now.
[Read more: "Where Nostalgia and Practicality Meet This Holiday Season"]
To entice shoppers in an inflationary environment – albeit one that’s coming off COVID-19 – retailers are looking to promotions to help them move inventory. Close to a third (32%) of survey respondents said they are planning to increase the number of promotions, up from 13% a year ago. Most are using paid search, along with affiliate marketing and paid social efforts.
As they get more aggressive with promotions, retailers are looking at the most efficient ways to spend their marketing dollars. “Competition is tight this holiday season, as many brands face more expensive customer acquisition costs,” explained Veronika Sonsev, co-founder of CommerceNext. “Privacy changes have really hurt paid social by limiting targeting and measurement, and for the first time in years, we’re seeing affiliates and partnerships rise to the second most used marketing tactic after paid search. Ultimately, attribution will be the key to expanding marketing channels. Retailers must go beyond last-click ROAS [return on ad spend] and implement incrementality testing and/or media mix modeling in order to successfully scale marketing.”
Retailers surveyed in this project also noted that they are focusing more on retention marketing, including traditional email marketing but also SMS (text) programs as digital engagement continues to grow.
Many retailers, including grocers, are already on the holiday bandwagon. Nearly half (45%) of merchants are encouraging shoppers to shop earlier.
The full report is available online.