Macroeconomic factors are complicating ecommerce success. As retailers find themselves in the thick of the holiday season, consumer discretionary spending has slowed down due to the ongoing impact of inflation, broader economic slowdown and fears of a recession.
3Q22 paints an unstable picture
Taking a quarterly view, recent earnings calls paint a hopeful, but ultimately unstable, picture. Shopify, for example, reported a “narrower than expected loss” at 2 cents per share vs. the anticipated 7, while beating revenue expectations at $1.37B vs. the estimated $1.33B.
According to Media Play News, Amazon reported a promising 13% increase in ecommerce sales over last year ($53.5B vs $50B). On the flip side, however, they also reported an anticipated $140-148B in global revenue for the fourth quarter, falling under industry estimates of $155B, with CEO Andy Jassy citing the unpredictable macroeconomic environment.
App installs fall
Another potential symptom of ecommerce decline is the recent dip in app installs. Mobile ecommerce constituted 7.3% of total 2021 U.S. retail, yielding $3.56 trillion in revenue—a 22% increase over 2020. Yet Android-based ecommerce app installs, for example, dropped 5% (excluding India) in the first half of this year as compared to last, while IOS installs dropped 4%. Thirty-day app retention on Android devices dropped 13% and IOS dropped 5% in the same period.
Ad spending budgets shrink
Post-Covid, people are online less, while the impact of war in Ukraine, supply chain disruptions, rising inflation and fears of economic downturn all continue to drive prices. Marketing budgets are also feeling the squeeze: ad spending for customer acquisition dropped 50% year over year, or $6.1 B, from July 2021-July 2022.
Black Friday promises big numbers for ecommerce
Here’s the good news: as Black Friday results roll in, the draw of the discount, coupled with mobile commerce and flexible payment options like BOPUS, appear to be proving successful. According to Adobe Analytics, online spending on Black Friday this year increased 2.3% year over year, hitting $9.12 billion. Whether or not the online spending surge will be enough for fourth quarter success remains unknown.
As broad economic factors collide, it’s difficult to predict what shape retail spending will take next. In a tight economic environment, how can you make the most of your marketing dollars? Can refined targeting strategies help boost performance in an unpredictable market?
Let’s review new personalization tactics and how you can best prepare to take advantage of them.
The latest in personalization can help—if you have the data
As the trajectory of consumer spending continues to zigzag, serving up the right offers on the right channels continues to be a tried-and-true lifeline. But moving forward, a winning personalization strategy requires more than adding someone’s name to an email. In fact, personalization is no longer the name of the game. Now, marketers are competing to “hyper-personalize” targeted marketing campaigns.
In order to stand out in the crowd, retail marketers need to consider how they can capture the full complexity of digital journeys to extract more customer insights that inform product recommendations and offers online and in-store.
Make sure you’re gathering and uniting all customer touchpoints to get the clearest picture possible. Otherwise, you could be personalizing based on an incomplete or unreliable foundation of data. Plus, make sure you understand your full customer base, not just known customers.
The unknown customer problem usually arises if your operation has an in-store component. Brick-and-mortar operations tend to lack the tracking capabilities of ecommerce. As a result, they don’t know who’s visiting their stores unless those people are self-identifying at checkout via a loyalty card, don’t have insight into their purchase behavior—and can’t target these individuals.
Start today with the right platform
Before you can launch any of these approaches to personalization, you need to make sure you have the right data and a way to turn raw information into actionable insights. The most comprehensive customer profiles draw from the widest set of insights possible – including loyalty, non-loyalty, known and unknown, in-store and online ones – and layer the greatest number of attributes for maximum segmentation and targeting. A quality data platform can help you unite all relevant customer touchpoints and build these profiles while incorporating the necessary attributes.
At Bridg, we offer the first and only solution that enables the identification, understanding and engagement of all customers, including loyalty, non-loyalty, offline and online.
Using Point of Sales (POS) data, bank transaction data and proprietary census of offline identity and behavior to identify individuals behind a credit/debit card transaction, we can help you build unified, privacy-safe profiles of loyalty and non-loyalty customers with SKU-level purchase history and hundreds of enriching demographics, socioeconomic and lifestyle attributes that power analytics and targeted marketing, creating one source of truth between your online and instore customer.
Contact us today to discuss how we can help you solve the “unknown” customer problem and leverage your customer data in a privacy-safe way for precise, effective targeting and personalization that will drive immediate and long term results.