By Cameron Bryant, co-founder of Sparro
Cameron Bryant, co-founder of independent digital media agency, Sparro, says that just as customers have been trained to expect Black Friday sales, brands have become reliant on them too.
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The last 6–12 months have been tough for a lot of retailers. Now, in the lead-up to the busiest period of the retail calendar, a lot of brands really need to do well this Peak Retail period.
A few desperately need to do well and are likely to chase revenue the same way they have for the last few years: heavy discounts, discount-focused messaging, aggressive bidding on bottom-of-funnel customers, and going even early for their Black Friday sales.
However, this year is looking to be different to the last few. So many brands competing for the same customers means that there are soaring acquisition costs in digital performance channels. In short, reach is far lower per dollar than in the last few years and the same tactics that have worked for years might not work this year.
‘Peak Retail’ is the term we use in agencyland to describe the busy retail period at the end of each year. In the Good Old Days™ it was centred on the roughly 30-day period between Black Friday and Boxing Day.
However, in the last few years, Peak Retail has expanded to include around 100 days between October and January. Social anthropologists of the future will provide their own reasons for this, but from a brand and marketing perspective, it’s pretty simple: consumers expect future sales and hold off buying anything, and opportunistic brands go on sale earlier and harder to try to beat the rest to the punch.
It’s not groundbreaking to claim that shoppers have been trained to expect sales. Black Friday, Cyber Monday, Boxing Day Sales, AfterPay Sales and Click Frenzy have become engrained in the psyche of online shoppers. However, there is an unspoken other side of the coin: Brands have become equally as reliant on these sales periods.
In fact, some retailers are expecting to make 30% of their H2 revenue in just a handful of days around Black Friday and Cyber Monday. Frankly, given the tough year that so many Australian businesses have had, a lot of retailers are going to have to.
So how can online retailers possibly hope to stand out (and survive) this peak retail period?
Sparro & Jack Nimble are hosting a Peak Retail event on Thursday 7 September to help answer this question for online retailers, including a panel of some of Australia’s biggest online retailers.
In short, however, the industry needs to move on from Peak Retail practices that are irresponsible, unimaginative and create risk for brands by:
1. Getting rid of same-same ad creatives that have plagued the industry for years.
Stark black ad assets with a large % discount and ‘website blackout’ takeovers are overdone. These formats cast aside all work to create a distinctive brand identity, sell promotion instead of product or brand values, and do not offer a reason to purchase beyond price.
2. Diversify from targeting bottom-of-funnel audiences on digital.
Economic pressure to deliver short-term returns has left every brand fighting for share of wallet from the same audience. CPMs and CPCs are incredibly high for conversion-ready shoppers this year, meaning brands won’t reach nearly the same volume of conversion-ready users per dollar as last year. Meanwhile, low-awareness audiences are left neglected.
3. Be protective of your margins.
Customers are savvy and it isn’t uncommon to find situations where a discount code is stacked with a cashback offer and a coupon and free shipping… and then the customer can just return the item anyway if they change their mind. Marketers need to understand that there are costs beyond CPC. They also need to know who their loyal customers are and where to find more of them.
The ship has sailed on customer expectations around Black Friday and, for the foreseeable future, customers will continue to expect a steady stream of sales and promotions. They will hold off on purchases and the highest price they will pay for a product will be the lowest they ever see it on sale for.
However, as marketers, we can drive value for brands by encouraging them to see performance media for its value beyond short-term return, or a bandaid for bad revenue months. Digital media is one of the most diverse and potentially transformative mediums for brands to build loyalty, trust, and educate their consumers. It just needs to be used to its true potential.
Brands need to get back to selling their brand — not just their products — if they want to enjoy sustainable, long-term growth. It’s the responsibility of marketers to ensure that the lead-up to the Peak Retail period is no exception.
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Top image: Cameron Bryant