Marketing Strategies for the 2022 Holiday Season
As we transition into the holiday shopping season, retailers are preparing for another period of uncertainty, which is driving changes to their marketing mix and budgets.
How people shop has changed dramatically over the past few years. Online sales skyrocketed 75% in 2020 due to the pandemic and a further 18% in 2021, advancing online sales volume by the equivalent of several years’ worth of growth almost overnight. Retailers scrambled to improve their ecommerce capabilities and reallocate marketing budgets toward digital advertising. Even retailers who did not invest in digital marketing experienced record online sales figures.
However, with the return to more regular in-person shopping, retailers have seen a softening in eCommerce sales. Although overall online revenue remains much higher than pre-pandemic levels, StatsCan is reporting that unadjusted retail eCommerce sales have declined 13% comparing January-August of 2022 to the same period in 2021.
At the same time, concerns around inflation have prompted consumers to change their buying approach, with 28% of people planning to spend less this holiday season and 48% deciding to start their shopping earlier than normal, according to Gartner.
These factors are creating major concerns for retailers as we approach Black Friday and the important holiday period, as they are up against strong year-over-year sales comparables. As a result, most industry observers are expecting this holiday period to be extremely competitive as retailers pursue a smaller pool of consumer dollars.
Based on these trends and our own in-market observations, we at Reshift Media are anticipating a rapid run-up of advertising leading into Black Friday which will be maintained throughout the holiday period. We expect this to create upward pressure on online advertising costs across most major digital properties, in particular Facebook, Instagram and TikTok.
In an effort to maximize the effectiveness of their digital advertising and bolster online and offline sales, we are seeing forward-looking retailers take several actions:
Starting early: Many businesses are starting their advertising much earlier than normal in an effort to capture early shoppers. Marketing campaigns are explicitly inviting people to “shop early” in order to capitalize on this trend.
Upping their digital spend: Knowing that competition for consumer dollars will be fierce this season, many retailers are significantly increasing their digital spending across a variety of platforms – social media, search, display, video and even online radio.
Experimenting with new platforms: Beyond advertising on the “major” platforms such as Meta and Google, a number of retailers are flocking to less-established online advertising opportunities such as TikTok and Spotify in an effort to expand their campaigns and reach new consumers.
Embracing video: Video advertising continues to be very popular with consumers across all social platforms which provides retailers with a strong opportunity to “breakthrough” the holiday clutter. The stratospheric rise of TikTok, particularly for younger Canadians, has brought video to the forefront of any conversation about digital advertising.
A renewed focus on data: In an effort to focus their efforts on the highest-value customers, smart retailers are analyzing historical and real-time sales data to identify top-performing marketing strategies, valuable customer segments and other purchase patterns.
It is very likely that this holiday season will be another challenging period for Canadian retailers, on the back of several years of uncertainty. However, we believe that businesses can continue to be successful if they implement a well-thought-out marketing plan and remain nimble based on changing market conditions.
Written by Steve Buors. Steve Buors is the CEO of Reshift Media, a Canadian-based digital marketing and development organization that provides leading-edge social media, search and website/mobile development services to retailers and multi-location businesses around the world.