Originally featured on TotalRetail
Consumers are back to pre-pandemic spending, and for stressed-out retailers, that’s good news this holiday season. Deloitte expects consumers to spend 14 percent more in 2023 than the previous year — the most they’ve spent since 2019. However, there are a lot of new trends that make this year very different from 2019 or any year since. Consumers are expected to trade down to less expensive items, shop later, lean into promotions harder, and buy more for others and less for themselves.
With the surge of e-commerce during the pandemic, retailers were forced to become more adept at digital marketing. As a result, competition is high at every stage of the purchase process — from awareness-based advertising to engagement to conversion. For advertisers that want to get an edge, trying something different this year by leaning into 2023 trends will help.
BNPL and BOPIS Capture More Bucks
Offering “buy now, pay later” (BNPL) can help retailers capture last-minute online shoppers for people who don’t want to splash out all at once. While high-consideration categories like auto and furniture brands advertise flexible payment options like 0 percent down financing, more affordable retailers have usually shied away from showcasing these details. Younger generations might be more receptive to BNPL messaging even in an ad. Gen Z relies on BNPL for smaller purchases like clothing and groceries, and actually spends more using BNPL than with a credit card.
Retailers can also advertise “buy online, pick up in-store” options (BOPIS) to attract last-minute purchases that occur past shipping cutoff windows. BOPIS has become popular with major retailers and consumers alike, with more than half of all online Walmart offers fulfilled in-store! Even for smaller retailers, the convenience and savings on shipping costs for consumers are a major draw. Combined with the chaos of the holidays, BOPIS is a sure bet.
Personalized Marketing on Social and CTV
To grab attention, advertisers can consider ways to personalize ads on channels like TV that are typically considered mass-reach. Advances in identity-based targeting on CTV make it possible for advertisers to reach people with personalized video. Retail marketers are wizards with personalized email marketing that's tied to shopping behavior, and they can target based on everything from past purchases to location and the weather, as shown by this targeted video ad.
What’s more, advertisers can now get creative with personalization at much lower costs than ever before. Free generative artificial intelligence will make it easy for advertisers to deliver high-quality personalized ads, including full commercials at a massive scale. Brands are starting to experiment with AI to see which elements drive performance.
Interactive Cross-Channel Experiences
With every dazzling CTV ad or enticing BNPL offer comes an opportunity to strengthen the impact of a campaign by bringing the attributes of different channels together in a coordinated ad — or to experiment with newer ad types to learn how they influence key performance metrics. An example would be incorporating a discount code on a CTV ad to drive traffic to a mobile app or to a local store.
The opportunities to mix and match ad experiences are endless during this time of year. Testing newer ad types like direct-to-glass experiences with more established ones like targeted social media ads can deliver both brand impact and incremental purchases. In addition to being memorable, multilayered campaigns encourage new habits by consumers like scanning an interactive QR code on their TV to shop from their mobile device. Brands track how many people scan an interactive direct-to-glass ad and measure the impact uplift that it drove to their online campaign. Why just advertise on a billboard when even more interactive opportunities are available? Ikea wowed shoppers with a drone show in India last year. This is a great example of how advertisers can take the experience even further by configuring new innovations like drones to create a QR code experience in the sky that links to a coupon for a nearby store or a personalized online discount.
Embrace the Holiday Magic
After a few years of forced innovation during the pandemic and the shopping frenzy that followed, it finally feels like retailers are coming out on the other side with many new opportunities on the horizon. This holiday season will bring to the surface the innovations that have potential to do more in 2024.
With more uncertainty than ever before about the future, advertisers are wise to experiment heavily right now. For advertisers, 2024 could be the end of the cookie, AI content could take over programmatic spend, and CTV could again outpace growth expectations. For retailers, it’s a nail biter as they wait to see if a recession lies right around the corner.
Having more tools available and the flexibility to pivot at any time are critical components to capturing consumer attention and thriving this holiday season.
