We would be remiss to dive into discussion on 2021 predictions for the retail marketing industry before first acknowledging where we stand. While many will be quick to say that 2020 was the year of insurmountable challenges and obstacles, at NetElixir, we prefer to look at it as the penultimate chapter in the retail industry’s book of pivots.
We still have work ahead of us, but we’ve made great strides toward a future that we’ve long hoped to achieve -- a future that values the customer above all else.
Let’s take a look at the three predictions we forecast will be top of mind for retail marketers as we enter the new year, and an exciting next chapter.
Big budgets may not equate to big success. Agility is the goal.
The pandemic has clearly shown that a big marketing budget does not always lead to marketing success -- there are ample opportunities for nimble and creative marketers to stand out and gain share.
Rapid experimentation and agility is no longer an option as we move into 2021; it’s a necessity. It will be critical to adapt to the new consumer, and that means pivoting to a marketing operating model that rewards not just the performance outcome, but insights as a service. With that, marketers should anticipate to reserve seven to eight percent of their total marketing budget for testing and experimentation as the industry adapts and innovates to accommodate recent buying behavioral shifts.
Actionable insights on consumer intelligence will be critical.
Seismic shifts in consumer buying behaviors will signal big changes in retail marketing strategies. Defining and unpacking these newly unfolding “pandemic personas” will tell marketers a lot about how they can best appeal to the future shopper.
For instance, as the pandemic unfortunately continues , products driven by needs (ie. essential items) continue to surge versus products driven by wants, such as those in categories like jewelry, apparel, and beauty. Consumers today are also researching more prior to purchase, and at a greater depth. They are hyper-focused on value, and frugality in spending has increased for many. In fact, according to NetElixir’s data, the latency between first website landing and purchase decreased by roughly 10 to 22% from pre-pandemic latency. Still, within this time, shoppers were visiting websites more frequently to conduct research, indicating that many were operating with a more value-conscious mentality than ever before.
The year 2020 was also the year of sociocultural change. Brand marketers can no longer afford to ignore social causes and stay silent. As many may have outright experienced this year, a “black box” on Instagram or a canned message to customers and stakeholders no longer checks the box. An Edelman survey in June 2020 even cited that a whopping 60% of the U.S. general population would buy or boycott from a brand depending on how the brand responded to the racial injustice protests that were happening at that time. Consumers want to buy from brands who are unafraid to take a real stand and actionable measures toward progressive change.
Consumers want an immersive mobile shopping experience.
The pandemic saw mobile engagement go through the roof, with mobile sales accounting for 43% of all orders in February, increasing to 55% in December, according to NetElixir. With nationwide lockdowns and safety concerns restricting the physical shopping experience, it’s no surprise that we are seeing a massive shift toward mobile engagement. But that’s not the end of the road.
As we continue to think, live, and thrive virtually, that experience needs to include shopping. Extended reality, especially augmented reality, will likely become a very important retail engagement driver in the months ahead. Retail marketers have the opportunity to think very creatively here in their quest to re-engage customers. Now is the time to take advantage of gaming activity and other trends top of mind for today’s shoppers.
The biggest challenge, and threat, for any retail marketer in the months ahead is, and remains, combatting legacy systems and fixed mindsets. It is the retail marketers who are not afraid to challenge the norms, remain nimble, and think creatively who will do the best in the months ahead.
Udayan Bose is the founder and CEO of NetElixir, a digital marketing agency that helps retail marketers find and engage high-value customers.