As a result of last year's improvised holiday season, this year presents new opportunities and fresh challenges for businesses that are trying to make a post-pandemic comeback.
According to Deloitte, holiday retail sales this year are expected to increase between 7 percent and 9 percent, while e-commerce sales are forecasted to grow by up to 15 percent. While this year's holiday shopping season presents ample opportunities for businesses to capture a share of consumers' discretionary spending dollars, the landscape has become far more complex given the privacy-related changes we have witnessed with iOS 14.5 and iOS 15. Most notably, these changes have limited third-party data and made acquiring new customers far more expensive.
At the same time, pent-up venture capital and private equity dollars are pouring into consumer startups, which has corresponded to an increase in marketing spend that is, in turn, driving up customer acquisition costs.
However, businesses, especially those with limited marketing dollars, need not despair. Being adaptable and implementing a few key strategies ahead of the holiday shopping rush will help businesses capture their share of the market and create authentic connections that will keep on giving for many more holiday seasons to come.
Customer Acquisition: Think Quality Over Quantity
When every retailer seems to be vying for the same discretionary spend, it can be easy to fall into the trap of being less choosy when it comes to selecting which customers' attention to vie for. Limited third-party data makes it even more complicated for marketers who want to optimize their ad targeting campaigns. As customer acquisition becomes increasingly expensive, businesses need to stay away from one-and-done customers.
The holiday shopping season should not be treated only as a time to bring as many people through the door as possible, but rather, should be an opportunity to attract high-quality prospects who can then be converted into loyal customers. Marketers should consider leveraging data analytics and business intelligence tools to figure out who exactly those loyal customers are.
In other words, it is even more critical now to find those with a high customer lifetime value (CLV). Once these segments are identified, make sure to personalize marketing campaigns to speak directly to these high-value audiences.
Build Authentic Relationships
While consumers are increasingly shopping online versus in-store, the desire for authentic relationships has not gone away. In fact, technology has made impulse buys less likely and made it easier for consumers to compare and contrast across different brands. These days, it is far too easy to close a shopping window when the experience or product is undesirable and head over to shop with a competitor.
This holiday shopping season, businesses should place a renewed focus on optimizing the entire customer experience. It is time to double down on creating an authentic relationship and using every touchpoint with customers to tell a powerful story about what the brand stands for.
One powerful way brands can do this is by leveraging data that customers share to better understand buyer personas to offer personalized recommendations. At the end of the day, a successful marketing campaign is much more about brand engagement and attracting repeat customers than closing a one-off transaction.
Combine First Party and Third Party Data for Best Results
It is no secret that recent iOS privacy changes have wreaked havoc on the digital advertising landscape. Marketers across industries are now grappling with the realities of living in a cookie-free world.
Given this new landscape, make sure to focus on acquiring first-party data and information directly from customers. These can include customer-provided data like emails and contact information or transactional data that tell a holistic story about their purchasing behaviors. Use this first-party data as the foundation and then add third-party data into the mix to assist in helping find buyer behavior patterns.
Using a combination of first and third-party data can prove to be incredibly powerful in providing a more well-rounded view of buyer personas including information on purchasing behavior, spending power, interests and demographics, and much more.
The upcoming holiday season will be an important moment for businesses trying to rebuild or grow their customer base in a post-pandemic world. A cookie-less environment certainly presents new challenges but those who are able to adapt their marketing campaigns to focus on finding customers with high CLV and building loyalty will ultimately find success in the long run.