Many client and agency teams are currently working day and night crafting their 2020 holiday and 2021 brand plans. In a more normal year (remember those?), the process for data-driven marketers would start with a review of FY20 brand and channel performance in order to determine what initiatives should be continued, stopped or re-imagined.
This year, however, has been like no other, so historical year-over-year metrics provide little direction in planning and forecasting the next phase of our “new normal.” Every piece of data seems to have a big asterisk next to it requiring context and caveats. Foresight is in short supply when it comes to determining new challenges retailers will face, so plans must be more flexible and agile than ever. Organizations that take a longer view and invest in customer relationships, build differentiated experiences, nurture brand loyalty by eliminating friction points, and deliver real value will see greater overall success.
Scenario planning that identifies reasonable contingencies, a test and learn approach to channel investment and innovation, plus a continuous learning plan that reveals actionable customer insights have never been more important. An emphasis (i.e., bigger budget allocation and staffing support) should be put on advanced analytics, customer experience, and market research like never before. The more intimate each brand becomes with the changing landscape, the better prepared they’ll be as things shift and evolve.
Customers are engaging with retail companies (and each other) more than ever through digital channels at the expense of in-store shopping.
All this change will force smart marketers to push beyond the boundaries of their tried and true playbooks and embrace new opportunities across digital channels. The toughest decisions may be what NOT to do.
Despite the uncertainty, there are some key trends that retailers can act on this holiday season to connect with customers. This includes starting holiday promotions earlier, becoming a health and safety advocate, understanding that consumers are more value conscious, delivering convenient experiences and focusing on personalization to stay relevant.
A few significant factors are shaping the backdrop heading into the 2020 holiday season: The continued health crisis, the recession, and social unrest.
The US infection rate is coming off its July high, yet it’s clear that the pandemic is far from over. Headlines tell the story of a continuing pandemic where there have been over 150,000 coronavirus deaths in the US alone. According to CNN in July, experts at Johns Hopkins called for a reset in the national coronavirus response effort.
The next wave of economic contraction is hitting businesses and consumers. It has been reported that the road to economic recovery will be a long one, as the coronavirus pandemic pushed the US economy into its worst-ever contraction. While job gains are happening, it has been reported that hiring slowed down in July as US employers added 1.8 Million jobs.
Racial inequity in the US continues to be exposed, and brands are taking a stance.
In July, Lowe’s announced that it is a founding partner of the BlackInfoNet (BIN) from iheartradio. Lowe’s notes that BIN is the first and only 24/7 national audio news service dedicated to providing an objective, accurate, and trusted source of news with a Black voice and perspective.
Bloomingdale’s is supporting NAACP Empowerment Programs, the Black Retail Action Group, and the National Museum of African American History and Culture. Bloomingdale’s is also encouraging customers to donate to the organizations by using their Bloomingdale’s Loyallist Reward Card or rounding up their next purchase at the register.
Retailers are working with nonprofits to promote community participation
The department store, Neighborhood Goods, hosted a Q&A with a nonprofit focused on creating vibrant neighborhoods, called The Better Block, on why community spaces matter.
Six months from when the COVID-19 crisis began in earnest in the US, Americans, while still experiencing prolonged shock and grappling with the realities of the pandemic, are beginning to live their new normal and even experience signs of recovery.
Many consumers feel the health crisis is stabilizing and are feeling more grounded in their personal lives as well. This is translating into greater concern for other pressing national issues, such as the economy and the nearing presidential election. Consumers are tired of staying home and waiting to re-start their lives, many have already made life-event decisions, like deciding to move to the suburbs, going ahead with their wedding or starting their families. These “special moments” for consumers also translate to financial needs.
Consumers are split 50/50 about their comfort levels with going out in public since March and tend to feel more comfortable doing activities that are fundamental, like grocery shopping, exercising, or attending medical appointments. Conversely, activities that are discretionary carry higher levels of discomfort (like travel and beauty services).
During this time, consumers have increased their use of e-commerce for their shopping needs. They have increased digital exploration, and there are 7.4 Million new e-commerce buyers projected in 2020. E-commerce has also accelerated and is expected to grow by 3X.
US consumers have changed their shopping routines as 60% plan to shop less in-store this holiday season. In this time of changing behaviors, consumers are also re-examining their brand choices. 50% of US consumers tried new brands and products during the pandemic. And the recession has decreased their discretionary spending, which is down 20% since February.
The findings and observations below were reported in the Dentsu Aegis Navigator September 17th study, a recurring report on the state of COVID-19 consumer trends.
Consumers are beginning to feel stability in the new normal. Many feel the COVID-19 health crisis in their community is stabilizing, and they are feeling their personal lives are more grounded as well. Over the past month there has been a significant shift in respondents identifying with “living the new normal and even moving into recovery” phase of their feelings about COVID-19. Brands should keep an eye on which behaviors are sticking during this period.
For communities of color, stability remains out of reach. For months it has been clear that Black and Hispanic communities are suffering disproportionately from the spread of the virus as well as and the economic and mental strains it’s brought. Our data, unfortunately, indicates that the suffering is not over. Brands should consider how to direct their efforts towards addressing the unique needs and challenges of Black and Hispanic consumers.
Safety and comfort continue to be individual choices. It’s clear that there is no universal standard to which activities are deemed “safe” to resume. Each consumer is deciding what is “worth the risk” to claim some sense of normalcy. Brands will need to present consumers with clear information about in-person experiences and safety measures so consumers can decide for themselves.
Advertising approaches should reflect the new normal. With consumers now more comfortable “living with the pandemic” brands should continue to speak to how they are meeting current challenges. Consumers feel favorably to brands that have adeptly reoriented around pandemic needs and are putting safety first.
Marketers should be prepared for 2021. Most consumers are now of the opinion that life will not return to normal until next year, despite progress in vaccine development. Brands need to have a longer-term plan to address lower consumer confidence.
There are a number of important trends for brands to consider and act on heading into the holiday season:
Insights:
Recommendations:
Insights:
Recommendations:
Insights:
Recommendations:
Insights:
Recommendations:
Insights:
Recommendations:
Insights:
Recommendations:
Insights:
Recommendations:
Insights:
Recommendations:
Retailers need to actively address marketing efforts given the new environment to overcome both today’s challenges while also capitalizing on new opportunities. Navigating holiday 2020 will require revised marketing guidelines to end the year strong.