Our last post discussed the challenges multi-channel retailers faced in Q1, but there were chinks of light. Here we go deeper into what was working for our retailer leaders as discussed in a recent Retail Leaders Forum – and reveal some potential good news on the horizon.
Shops returned – and so did shoppers
While digital struggled following its recent highs, bricks and mortar came back stronger. After missing shopping during lockdown and the emotional connection it offers, consumers returned to the relief (and benefit) of retailers with stores. But even here, success was mixed.
A move to event shopping saw several forum members reporting a return in demand in the major cities and shopping centres they hadn’t seen for some time. But for one, while the cities improved, its stores in secondary towns saw a decline in performance from late November 2021. This contrasted with another multi-channel retailer that experienced strong trading over Q1 for its stores that are all located in market towns. Overall, retail performed well and was a bright spot in a challenging quarter.
Triggered emails drove success
One area retailers saw growth was from automated triggered emails. While standard broadcast campaigns delivered acceptable returns, those driven by trigger points unique to each customer performed well. By refining the execution and delivery of welcome programmes and date-led automated emails, retailers were able to drive result improvements.
Reactivation proved effective
While challenges remain around recruitment, focusing on reactivating lapsed customers brought revenue performance improvements for a number of retailers. An obvious low hanging fruit when it comes to activity, those attendees concentrating effort here recommended every retailer to focus on this area. Revisiting communication schedules, testing optimal times to re-engage customers (while taking into account the purchase frequency for products) and refining messaging and email sequencing paid dividends and helped retailers offset some of the downturns from their other activities.
Testing new channels was vital
David Lockwood, Tapestry’s Insight Director, stressed the need for every marketer to try new media, channels, and approaches, particularly during these challenging times. With prices rising significantly, the need to go above and beyond what’s been tried before to counteract the issues faced was essential.
To mitigate the challenges around digital, some businesses evolved their channel strategies, testing events and door drops to counter their reliance on digital paid media.
Others pivoted away from established platforms and embraced the newer ones. One retailer shifted from using Facebook as a sales driver to a lead generation tool instead. It also switched investment into Tik Tok, stating that despite perceptions this is targeted toward much younger audiences, the demographic profile of the video-sharing platform’s audience has shifted quickly.
Exploring opportunities around podcast advertising, testing pre-roll video advertising, and looking into audio were also suggested.
Spring’s green shoots of hope?
Despite the poor Q1, the good news was that all attendees were experiencing an uplift since the end of March/early April. The onset of spring, an improvement in the weather, Easter in April and the longer days and lighter evenings have brought renewed consumer optimism that is translating into sales.
Two other factors also added to the positivity of retailers.
- Consumers are adjusting to the current realities: While the bad news cycle continues, consumers are acclimatising to what’s happening economically and globally. As they learn to live with the current situation, this will feed into a level of optimism and more willingness to spend.
- Shipping costs are starting to normalise. After all the supply chain disruptions, bottlenecks are being removed, port congestion reducing, and new shipping capacity coming online. This will see shipping prices falling in the second half of 2022, which will bring some cost and stock pressure relief for multi-channel retailers.
Expectations amongst the forum members are that it will be a good spring and summer, and all have higher aspirations for the coming months. But many sounded a cautious note for the end of the year with fears that new price rise pressures and ongoing inflation may dampen consumer confidence when entering the critical trading period for many businesses.
As challenges continue to impact multi-channel retailers, if you’re looking for inspiration to reset your marketing strategy and adjust to today’s environment or want to discuss your particular issues, please get in touch.