5 Ways Marketers Can Tackle the Challenging 2022 Holiday Shopping Season
It’s the end of summer, and just like clockwork, marketers across the country begin shifting into planning mode for the upcoming holiday shopping season. This year the deals started coming earlier than ever as Amazon’s Prime Day event in the summer forced many big box retailers to hold their own “Christmas in July” promotions to compete.
As we draw closer to the so-called “Turkey 5” (the busiest shopping days between Thanksgiving and Cyber Monday), that heavy competition shows no sign of slowing. Add in inflation, supply chain irregularities, and the lingering effects of the pandemic, and it is clear that marketers and small business owners will need a solid, data-driven strategy for holiday marketing in 2022 to stand out from the crowd.
Reviewing the challenges of holiday marketing in 2022
Advertising costs skyrocketed during the 2021 Turkey 5 period and have remained stubbornly high throughout 2022, with Google cost-per-click (CPC) rates up 20 to 25% year-over-year. The forces underlying these increases are complicated, but the bottom line is that attracting new customers will be more expensive than ever this year.
Consumer demand has also softened significantly since last year. Pent-up demand for experience consumption like travel, concerts, and movies has taken a big bite out of online spending, and persistent inflation is forcing many consumers to consider their purchases more carefully. In July, U.S. online prices fell year-over-year for the first time since 2020, and even Amazon, the biggest name in e-commerce, is feeling the effects. In the first quarter of 2022, the online giant’s net product sales fell compared to the first quarter of 2021.
So what does this information tell us about the upcoming holiday season?
What to expect from the upcoming holiday season
While making accurate predictions so far in advance is always tricky, I expect to see declining sales and high advertising costs this year, which can be particularly difficult for direct-to-consumer and small businesses. Additionally, I recommend that marketers build their strategies on these general assumptions:
Sales will stagnate. Despite high inflation and recession worries, the economy has remained resilient with very low unemployment rates. However, it’s not yet clear if e-commerce spending will bounce back before the end of the year. These factors lead me to believe that Turkey 5 sales likely won’t grow significantly over 2021.
Margins will suffer. I expect advertising costs to continue rising on Amazon, Facebook, and Google through the holiday season, likely setting new fourth-quarter records. Those additional costs will eat into retailer margins, reducing profits.
Discounts will arrive earlier. An inventory glut left over from pandemic supply chain challenges forced many retailers to hold lavish summer sales to free up cash. However, a rumored second Amazon Prime Day in the fall may push many big box retailers to offer their best holiday discounts before the Turkey 5 even arrives.More articles from AllBusiness.com:
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5 ways to overcome these holiday shopping hurdles
With these general projections in mind, here are a few tips that may help marketers build a successful holiday strategy.
1. Reconsider marketing goals
The marketing landscape has changed dramatically over the past two to three years. Marketers can no longer rely on a steady stream of inexpensive PPC traffic to drive sales. Instead, the path to purchase has become much more expensive, complicated, and challenging to track. Consequently, some marketing goals may no longer be relevant or achievable under current conditions.
Before marketers begin developing their 2022 holiday strategy, they should examine their marketing goals with fresh eyes and consider adopting an omnichannel approach that judges each channel based on what it does best.
2. Focus on existing customers
As new customer acquisition costs continue to rise, existing customers will become increasingly valuable. With this in mind, marketers should prioritize building direct channels to their customers (like email) and creating loyalty programs that reward repeat purchases.
These efforts will also have significant downstream benefits because marketers that can deploy clean, first-party data into Google see more efficient and effective advertising results.
3. Don’t follow the herd
Some marketers can discover significant advantages by working against popular sentiment. For example, Apple’s recent privacy changes have complicated data gathering on Facebook, a platform that has long played a central role in holiday marketing strategies. As a result, many marketers are pulling money from Facebook in favor of platforms that can deliver a more precise return on ad spend.
This shift could provide an opportunity for some marketers to invest in Facebook and build their brand in an environment with less competition and lower costs.
4. Try something different
Marketers that can approach their holiday strategies with a bit of out-of-the-box thinking will have an advantage this year. Collaborations with strategic partners, like list sharing, co-marketing, and product partnerships, can pay big dividends for all brands involved.
Influencer partnerships will also play an important role this year, but brands need to act now to get their products into the hands of influencers and in front of consumers well before the holidays.
5. Be willing to pivot
While creating a solid strategy is critical, marketers should closely monitor data points like conversion rates, search volume, and margins throughout the season for indicators of success and failure. Marketers who are willing and able to quickly pivot away from their existing strategy in the face of changing conditions will have a much better chance of finding success during what is shaping up to be a highly competitive holiday season.
Keys to a winning holiday season shopping strategy
Marketers have faced some wild market shifts over the last few years, which has made planning unusually challenging. The upcoming season looks to offer more of the same, with rising advertising costs and softening consumer demand serving as significant obstacles to success.
To compensate, marketers should remain flexible and search for creative ways to reach new customers, while nurturing the customers they’ve already won. Along the way, they must keep their eyes fixed on the data and their customers’ needs.
Staying true to these cues will give them the information they need to build a winning strategy for holiday marketing in 2022.