The launch of early access Prime Day was just the latest sign that festive sales are getting ever earlier and less focused on Christmas giving. Kicking off as far back as September, consumers are increasingly being bombarded with a series of mega promotions and deep discounts from leading retail players, including Tesco, John Lewis and Morrisons.
At a time when 80% of inflation-concerned consumers are set on hunting for bigger savings, the urge to slash low and fast is understandable. Equally, however, moving to frame seasonal campaigns mostly around price also presents brands with a set of challenges.
From the business perspective, it’s likely that swallowing the impact of price cuts will cancel out any profit gains from temporary purchasing boosts, as recently discovered by Sainsbury’s. Arguably more crucial, however, is the risk of failing to meet other vital needs beyond bargain deals and hurting shopper relationships. Just like advertisers, consumers want the best return on their investment, which means they’re looking for maximum value at every level.
For brands hoping to successfully harness the holidays and gifting budgets, this makes it key to capture attention using smart and relevant communications, not just cost.
Price matters, but value wins
It would be unrealistic — or at least overly optimistic — to say that price isn’t going to hugely impact purchase consideration and sales this Christmas. As inflation rates continue to hover around a 40-year high of 10%, the coming weeks will bring more frugal festivities for many consumers, with budgeting already widely in motion. A recent survey highlights four in ten consumers plan on buying fewer presents, while 60% are looking to curb their general everyday spending.
To avoid isolating stretched shoppers and stay competitive, this means retailers must keep a keen eye on costs. But it’s also essential not to let tough economic conditions completely override the core foundation of good marketing: the value exchange.
As long as brands deliver compelling and engaging experiences, they have a high chance of securing consumer interest, custom, and ideally trust, in return. This deal hasn’t changed, and nor has its particular importance for gifting. Consumers buying with the needs of others in mind are often even more focused on receiving optimal value, as underlined by findings that over half currently name quality most crucial when buying Christmas presents.
Although shoppers are looking to spend less, cost isn’t all that matters. The brands who win the greatest spend and strongest confidence will be those that enable consumers to achieve their main goal of buying great gifts and treats that meet unique needs, with price a significant yet secondary priority. And taking into account the vast variety of individual preference, doing so effectively is going to require a deep level of accurate, real-time audience insight.
Data sacks are bulging yet unusable
Theoretically, modern retail brands are well placed to tap customer information and translate it into actionable insight. Thanks to increased technology investment, they can now provide easily accessible online services and have more potential to collect rich first-party data about customer activity, as well as layering in further information from other channels and sources.
Rapid expansion, however, hasn’t always included application of essential data management basics. Racing to evolve amid the pandemic ecommerce boom, a large number of companies have overlooked structural necessities for making the most of advanced tech and data.
This is partly why Gartner has discovered just 42% of martech leaders feel they’re getting the best from their stack. It also explains our own research finding that over three-fifths of CMOs feel overwhelmed by available data. The problem isn’t so much about having too much of a good thing, as lacking the right setup. All which points to an obvious need for better integration to gain a clearer picture of each consumer, and what’s on their wish list.
The spirit of always-on relevance
While there is no recipe for perfect seasonal sparkle, embedding the framework necessary to connect data across their stack will equip brands to achieve their ideal balance with efficient and meaningful marketing.
The ability to link disparate data and generate a single view of individual journeys will power accurate and continuous mapping of unique habits, behavioural and browsing patterns. On top of ensuring brands can keep track of changing situations and needs, this cohesive view will provide reliable fuel for carefully targeted and personally impactful messages.
For instance, analysis may indicate that a consumer is interested in premium gaming gear yet shopping with limited resources: including visits to product pages for high-velocity consoles and engagement with social media posts around budget-friendly buys. Serving an ad for the highest rated items at a medium price point will tick the boxes of quality, relevance, and cost.
Similarly, unified oversight of how shoppers engage with messages across channels will allow brands to instantly determine what is working and adapt in-flight promotions for improved outcomes; be that switching creative slots to feature the products certain audience groups prefer or diverting spend from poor performing ads to cut wastage. Moreover, persistently layering in data to enrich shopper profiles will help brands deliver more tailored and impactful messages over time, forging bonds that last long after Christmas.
Much as it can be tempting to chase short-term sales that prop up intermediate profits, brands must get back to value-centric fundamentals to ensure long-term survival. Consumers inundated with offers and rapidly approaching discount fatigue don’t just want bargains. The brands that add an extra touch of festive magic by dialling up their ability to meet every unique definition of quality will see the highest rewards and avoid a price-based race to the bottom.
Mark Debenham is VP of Growth Marketing at data platform Adverity.