Back to ‘Normal’ Requires Omnichannel Approach
The contrast is stark. More than 12,000 stores closed in the United States last year, while e-commerce continued to flourish. Retail categories like apparel and department stores struggled through 2020, even though verticals like beauty and home goods saw tremendous growth.
Covid-19 upended retail and pushed companies into bankruptcy. As we look at getting back to normal in 2021, many of the businesses left standing are now facing new competitors that didn’t exist prior to the pandemic. Others are seeing a radically altered marketing landscape with consumer preferences having moved toward delivery services and online shopping.
The next few months are make or break, and many retailers are grappling with how best to respond.
One strategy is to lean into diversification with an omnichannel approach to marketing. According to Rory Mitchell, executive managing director of the Americas at Criteo, retailers re-entering the market should consider diversifying their marketing on other channels that they may not have indexed on prior to the pandemic. These include things like mobile, CTV, and video.
“It’s been a full year since the initial onset of the pandemic, and while some marketers took a conservative approach to spending during this time, many are ready to increase investments in order to start interacting with their consumers again,” Mitchell says.
According to a report by Magna, U.S. advertising revenues are predicted to increase by 6.4% to $240 billion in 2021. With vaccine rollouts, Mitchell says there’s reason to believe that hopeful consumers will be eager to get back into their routines, and they will be willing and ready to start spending money again.
Recent data and predictions on consumer spending patterns in 2021 back up Mitchell’s assertion. According to McKinsey, more than half of U.S. consumers expect to spend extra to “treat themselves” post-pandemic. Retail spending surged by 9.8% last month, beating expectations of 6.1% and substantiating optimism about consumer appetites.
As a result, retail chains are embracing the shift by launching new campaigns and preparing their stores for a return to in-person shopping.
“We’re seeing stores such as Petco roll out store expansion plans as they prepare for an influx of demand in the coming year and Saks announce Saks.com as a separate brand with the mission of becoming the world’s largest luxury e-commerce site,” Mitchell says.
New Competitors Emerge
Unfortunately, as retailers bring back their marketing budgets and relaunch successful campaigns, they are finding that new competitors have emerged. E-commerce spend was up 44% year over year in 2020, as existing online shoppers bought more and new online shoppers adopted new habits out of necessity. Many of these competitors are based on the internet, having had the opportunity to connect with consumers and build loyalty while traditional brick-and-mortar stores were closed.
Mitchell’s advice for retailers facing this new competition is to hold strong while consumers return to some of their pre-pandemic patterns while also exploring new marketing avenues and cross-channel strategies designed to pull people back in-store.
“While e-commerce has seen growth, people are still going to want to buy in-store, so marketers coming back into the market will need to be prepared with an omnichannel strategy for this new omni-shopper,” he says.
There’s also been a shift in the ways that brands are interacting with consumers, as many habits that were introduced during the pandemic continue to stick around. For example, virtual showrooms, contactless payments, and buy-online-pickup-in-store (BOPIS) are all options that consumers turned to throughout the pandemic. Mitchell says retailers that were able to provide these options and bypass supply chain issues rose to the top in 2020, becoming the preferred choice for consumers and creating a whole new set of competitors for those who couldn’t keep up. Instead of thinking of marketing in terms of specific channels, he’s encouraging Criteo’s partners to build their strategies around meeting consumers where they are.
“In many ways, I think of the living room as a channel in and of it itself. We’ve all spent a tremendous time at home, sitting in our living rooms and consuming content from our couch whether that be through our TV, laptop, mobile phone – or sometimes, all three,” he says. “The attitudes and buying behaviors of consumers have completely shifted, and marketers should be thinking of ways to capitalize on the mediums that consumers are on today instead of where they may have been traditionally in order to reach and engage with them.”
Ultimately, Mitchell says what’s most important is that retailers are able to connect the dots as consumers venture throughout their shopping journeys in order to provide them with a personalized and seamless experience that keeps them coming back.
“To see success, marketers need to implement an omnichannel strategy that delivers a unified message across the consumer journey, especially as consumers browse, shop, and view content on more mediums than ever before,” Mitchell says. “CTV and OTT are both areas that I would recommend marketers invest in today, as it’s seen massive growth throughout the last year … Regardless of the channel, brands and retailers should be prioritizing their first-party data strategy to continue providing personalized advertising.”