Retail Marketing Channels Realign and Reallocate their Budgets

    Retail Marketing Channels Realign and Reallocate their Budgets

    In addition to transforming how consumers work, the pandemic is also changing customers’ purchasing patterns – especially as the world shifts online.

    Among pre-dominantly store-based retailers, the number of online orders in Canada and the U.S. were up 56% year-over-year for the two weeks of March 22 to April 4, as per the online tracker from analytics platform GoodData and marketing platform Emarsys.

    With more consumers shifting online to meet their shopping needs and with marketing budgets getting tighter, retailers re-evaluate where and how effectively they’re spending their precious advertising dollars.

    Pre-COVID-19, retailers took a diversified approach to their paid marketing initiatives, which seek to include some combination of paid search, paid social, retargeting, programmatic, display, and affiliate marketing.

    Post-pandemic, retailers are mainly focusing intently on various channels that offer a high return on ad spend (ROAS), low cost per action (CPA), and are performance-based. A major reason for this is that brands are constantly offering steep discounts and sales to entice consumers.

    Read More: Content Marketing Is a Staple for B2B Enterprises in This Digital Era

    With aggressive discounts, performance-based marketing channels are driving incremental revenue more profitably as compared to other channels. As such, the priority for major brands is now on paying for marketing campaigns that convert.

    For those retailers having an affiliate marketing program, most of them find that this performance-based channel allows them to realize high ROAS outcomes and low CPA.

    The Shifting Focus to Performance

    Since the beginning of this crisis, many retailers have confirmed turned off upper-funnel marketing channels, including Google product listing and other display ads. They’ve shifted a major chunk of their marketing budget towards their affiliate program to refocus their campaigns, strategies, and partnerships towards the lower-funnel conversions.

    Since affiliate marketing has comparatively fewer steps to purchase, this model has been highly effective in allowing retailers to multiply their conversion rates to spend more efficiently.

    Even though traffic might go down, the clicks through affiliate programs are converting quickly — in some cases as high as Cyber week. Additionally, along with the fewer marketing channels disrupting the customer purchase path, more people are shopping with a holiday season mindset: they’re searching for the best available deal or an incentive.

    Affiliate partners, such as coupon sites and loyalty programs, are playing a pivotal role in assisting brands in reaching consumers seeking to save as much as possible and in the most cost-effective manner.

    Read More: Voice Technology Transforms Customer Journey Management Beyond Expectation

    Enhancing the Effectiveness of the Marketing Partnerships

    If the brand has an affiliate marketing program and is realigning its marketing efforts on performance-based, high-conversion channels like affiliate, below are the key things to keep in mind:

    Performance-based partnerships are highly critical. With the constantly changing promotional offers, brands need to promptly communicate the changes to the partners.

    Provide precise messaging to partners. The client’s programs should communicate clear promotional messaging to boost conversion rates.

    Awareness still remains relevant. Even brands focusing on bottom-of-funnel conversions are constantly collaborating with content partners from their affiliate programs to cost-effectively tempt the attention of consumers seeking new ways to occupy their time at home.

    Test and try new partnerships. Multiple retailers have realized that testing affiliate partnerships with innovative and new partnerships allow them to increase their customer reach. Few of those partners have also waived slotting and integration fees.

    Pay it forward. Most retailers have increased their partnerships with various loyalty sites to contribute to existing charitable causes through their affiliate program.