Locating Holiday Success for Small Businesses
The holiday season is always a crucial time of year for small business retailers. With the added financial strain of the pandemic, it’s more important than ever that business owners think creatively to maximize sales while keeping shoppers and employees safe.
If you have a small brick-and-mortar shop, you’ll likely face fluctuating in-store traffic and unpredictable consumer demand. The key to a profitable holiday season is, at least in part, how well you prepare for and respond to these challenges.
Planning and spending are two actions that are now closer together than they have been in the past — budgets are not planned as far in advance and are instead determined by recent sales trends. To prepare, companies have boosted online sales, implemented touchless transactions, introduced local delivery, and created customer gift lists, along with putting in place a range of new safety protocols in their stores. For example, in a recent report from Visa, 60% of SMB owners are taking steps to prepare, including more than a quarter (27%) who expect to extend business hours. Other steps included digitizing parts of business operations (26%) and investing more in physical infrastructure (19%).
Ultimately, this means that small businesses are spending earlier than the typical holiday season and leveraging new technologies to drive traffic both online and in-store.
Targeting Customers Across Online and In-Store
The pandemic has accelerated the adoption of newer shopping options as stay-at-home orders and social distancing prompted shoppers to reduce time spent indoors or in public places. Online holiday sales in the U.S. will surge 34% year over year for the 2020 season, nearly tripling the 12% growth registered in the prior year, according to data from Salesforce.com.
Because of the enormous spike in online transactions, there are more ways for customers to shop than ever before, creating new opportunities for small businesses to connect with core segments and personalize messaging with data-based insights grounded in historical trends and real-time behaviors. The ability to target individuals based on where they have previously been is tremendously valuable as consumer behavior has been required to adjust to ever-changing guidelines at the state/city and local level.
This dramatic shift points to location targeting being more important than ever this year. Those who make an in-store visit after seeing an ad spend an annual average of 27% more than those who are not shown an ad. Knowing more about e-commerce conversion rates, and how visits to physical retail stores impact the online and offline purchase cycle, is incredibly useful to small businesses. Here are three areas where location can play a role this holiday season.
Personalize with Household Targeting: The household is often the central focus of ad targeting efforts for businesses selling items shared by family members or products and services centered on life events. Small businesses can push personalized ads that guarantee better customer engagement with household targeting. Coupled with a CRM system with access to existing or potential customers’ details, you will be able to create personalized messages for them to garner their interest. This will brighten up the chances of success of your marketing campaign.
Pick-Up Zones: Being able to target consumers who are still spending heavily in-store amid the pandemic, and finding out what makes them different from consumers who are shopping exclusively online, has been a challenge for marketers up until this point. By utilizing targeting technologies, small businesses are able to differentiate messaging to consumers who are picking up purchases via curbside programs and consumers who are getting out of their cars and shopping in-store.
Omni-Channel: Small businesses can see which customers or products might be missing from their mix. In-store, online, and mobile behaviors can be connected by where the interaction took place. Engaging the consumer not just in-store but also online across the multiple platforms and devices where a particular shopper may live creates a more precise understanding of the journey to purchase.
What Channel is Right for Me?
There’s a lot of competition in the marketplace for small business ad budgets around the holiday period, so to get the best value for your money and efforts, do your research on where you’d have the most impact with your customers to figure out which channels you should prioritize.
Mobile, online, and Connected TV (CTV) each provide small businesses opportunities to focus their ad spend on specific areas and incorporate all three for an omnichannel, targeted approach. As holiday shopping continues to grow across media, small businesses can extend reach and amplify their message across key media consumption moments across multiple screens.
Mobile: The gap between promotion and purchase is closing and making the experience more seamless. Mobile continues to grow every year in e-commerce sales, and 2020 will be no exception. Mobile marketing is even more important in the Covid-19 era. Though in-store shopping has declined, many shoppers still visit stores. According to Selligent research, 35% of shoppers mix both in-person and online shopping, and 36% still shop more in person than online. So there’s a great opportunity to reach potential customers with time-based, location-based and personalized messages.
Shopping through social platforms will see a good amount of traction this holiday season, and small businesses should take advantage of this trend. As they update their social channels with promotions for the holiday season, small businesses need to ensure they are targeting the right customers based on their behavior. Ads need to be relevant and engaging for each shopper.
Online: By applying location to online, small businesses are reaching an audience in an environment that historically drives higher overall conversions. Consumers may be deal shopping, but the right message at the right time, targeted to the right people can greatly improve conversions. Small businesses can reach likely shoppers based on past behaviors to stay top of mind during the last-minute dash. If driving them online, include a dynamic countdown for shipping cut-offs to help promote urgency and drive conversion.
CTV: CTV ad spend in the U.S. is expected to increase by almost 30% this year, and industry reports anticipate that over half of marketers are following suit in H2 2020, which outperforms non-CTV/OTT video ads (56%) and social media (56%). CTV ads make addressable targeting highly effective, especially among the increasing number of cord-cutters. Using rich audience data and targeting capabilities, small businesses can adapt their program to drive business to their local brick-and-mortar locations by serving ads based on their customers behavior. The ability to localize your creative can pay major dividends and location targeting allows small businesses to pinpoint their ideal audience in the right location and customize the ad creative to deliver a local message.
Even in the midst of a pandemic, experts are expecting an increase in holiday spending this year. Small businesses have an opportunity to capitalize on this new shopping environment and develop unique revenue and outreach opportunities to set themselves up for success moving into the new year.
Rosie O’Meara is chief revenue officer at GroundTruth.