As we approach the end of this extraordinary year, making predictions for what is to come would seem naive. The world is a fundamentally different place to the one we were living in pre-pandemic, and our behaviour has adapted in many ways.
Brands need to listen to consumer signals to make sure that they too are adapting their digital marketing to reflect these changing behaviours rather than attempting to ride out this difficult period and wait for the good times to return. With uncertainty still surrounding our lives in these unprecedented times, smart brands will need to ask themselves some tough questions to ensure they can survive the turbulence.
Have you retrenched or re-engineered?
It is interesting to observe the brands that have focused on simply retrenching their marketing activity, compared to those that are adapting to genuinely changed behaviour. With teams on continuing furlough and revenues down, many digital marketing teams are feeling hamstrung, staying in 2019 mode until the revenues return to justify investment in digital capabilities. This may be a fact of life for some organisations, but it is worth noting that many brands have taken a different course. They have used this time to follow the data. This involves revising their marketing planning to account for dramatically different buying patterns, and re-engineering their overall approach to capturing and leveraging data at a time of changing tech environments and customer sentiment. This ranges from travel companies and hotels pivoting to campaigns targeting spikes in demand for shorter-term and domestic bookings to retailers re-gearing their tech stacks to take account of the changes in cookie and privacy compliance requirements.
Do you have a plan in place for the end of the cookie?
The cookie, while not quite dead, is certainly crumbling. Pre-pandemic, the end of the cookie as the core measurement tool in digital marketing had already been foreshadowed – Europe’s GDPR and California’s CPA have set out the legal frameworks for new requirements for privacy compliance, and Apple’s ITP safeguards now block the use of third-party cookies on their devices. Google is now committed to following this, with similar blocks for its Chrome browser by 2022. This means a fundamental shift is now required to enable the targeting and re-targeting for brands to spend their budgets efficiently and accurately.
The new game in town will be successfully realising the power of first-party data and brands should take the time to develop a new playbook. Working to unlock the value of existing customer data in the months when media and IT teams are less burdened by business-as-usual is a wise use of time. If you can answer the questions ‘who are your loyal customers and what are my best tactics for upselling them?’ you’ll be ahead of the game.
Are you reacting to the changing profile of online retail?
There is great focus at the present time in the analytics community on the changing profile of online retail, and shopping behaviours that have emerged during the pandemic. This applies to both the type of purchases and the types of purchasers. McKinsey’s October 2020 survey of UK consumer sentiment during the Coronavirus crisis reports that “63% of UK consumers have changed stores, brands or the way they’ve shopped”. Crucially, the number of people in the 55+ age category making regular online grocery purchases increased by 8% last year to 23% in 2020. Another study indicated a third of over-55s said they will permanently shun the high street and switch to online shopping for clothes, food, fitness and gardening equipment as a result of the coronavirus pandemic.
While it is early days in understanding these new customers, brands have the chance to build impressive lifetime revenues from a potentially new brand-loyal online audience who may be less price-sensitive than early adopters, many of whom saw online as a way of finding lower prices rather than convenience and range of produce. Indeed, the whole price-driven nature of internet shopping has been somewhat disrupted during this time. We are seeing shifts in perception about buying luxury and high-priced gift shopping during the pandemic – another area where those who have focused on digital transformation will be best placed to succeed in 2021.
As we approach the end of the year it is clear our digital lives have been altered significantly. We are spending more of our time online but in different ways to cater to our different needs. Brands need to follow the data and learn the lessons so they can remain relevant, whatever the next year holds.
Richard Wheaton is managing director of 55.