Hindsight is 2020, yet we look at our very recent history and we are still reminded that the points below apply — perhaps now more than ever:
- Adapt or die.
- Change is constant.
- It’s difficult to predict the future.
- We can’t predict the customer journey.
- We can’t predict how consumers will react to change.
However, we can implement measures that will decrease uncertainty. Retailers globally have had to make monumental changes to their everyday lives in order to survive. Some have had to move quickly to be responsive in an increasingly online world, others have had to change their stock offering to remain relevant. Arguably, there has been more change in the past six months for some retailers than there has been in the previous six years. They, like any of us, couldn’t predict the changes that came their way. Given no time at all, some retailers made some pretty poor decisions that affected their partnerships, bottom line and entire value chain.
Arguably, the biggest takeaway has been that brands cannot afford to delay selling their products and services online any further.
Let’s look at a few of retail’s changes
Traditional and non-traditional retailers across sectors have seen a huge shift in consumer needs and behaviors. Apart from the unavoidable shift of people spending more time online than ever before, there has been a monumental change in government directives affecting commerce. Some businesses have been fortunate to be in a space where their offering has become more desirable: credit companies, home delivery businesses, and gaming, to name a few. Other businesses are less fortunate, like those that sell tickets for live events or shows. How do these businesses remain relevant to their audience? Diversify. Diversify how you market, what you market and whom you market to.
Instinct will tell you to tighten up on your budget by consolidating your marketing spend and cutting back on discretionary spending. How do you do this? Rely on your partnerships to provide speed to value by paying for performance rather than having the opportunity cost of traditional marketing channels. Your partners could possibly provide leads/sales to the top of the funnel quicker and more cost-effectively than your other channels.
Rely on your partnerships to provide speed to value by paying for performance rather than having the opportunity cost of traditional marketing channels.
How does this work in practice?
Simplicity is the key. For a new audience, start small and earn trust by pushing desirable products and elevate categories consumers need the most. Think of it as reshuffling your shelves and putting more desirable products at eye-level. Online shopping is a convenience-oriented experience, so you can ultimately drive the greatest convenience by providing customers with the quickest path to locating items of interest, allowing them to easily build their basket, and check out quickly.
For returning customers, allow for loyalty-based incentives to maximize basket size and frequency. Make sale items immediately available. Apply dynamic product recommendations using past purchase behavior patterns like brand or dietary preference to drive up the basket size. Partnerships with companies like Upsellit and RevLifter provide these types of conversion optimization solutions, which have shown the potential to drive higher conversion rates and larger basket sizes, and only get paid out when your tracking solution shows they have driven incremental spend.
Paying your partners fairly for the value they have driven is imperative in building a long-standing relationship. Some of the key metrics could be “new” vs. “returning” customers, percentage of cart value or even some SKU’s. However, not every sale is as valuable as the next. Having the power to change your payment rates at an SKU level is exceptionally powerful if you’re running a lean business.
Two critical elements to consider here are:
- True value of the channel includes identifying new or returning customers.
- Incentivize partners to be creative and drive sales (read more about how to do this here in my previous blog post).
Hindsight is 2020
As for what to do with the inefficient paid media budget mentioned before: Redirect it toward your partnership channel. Use it to incentivise your partners further and pay for performance. You are planning not only for now but the future. The market will bounce back, it may not be in the next few weeks, or even next several months, but it will bounce back. History has shown this. And when the bounce back happens, you want to be ready for when your audience is prepped and ready to spend. The best shot at coming out at the end of this is partnerships.