By Beth Tait, Managing Director at Go Inspire
The pandemic has radically changed our shopping habits, disrupted purchasing patterns, and led to the emergence of new behavioural profiles. In the current climate, past models and assumptions have gone out of the window, forcing marketers to rethink their pre-pandemic strategies. Companies are now cautious about investing in their advertising and marketing campaigns in these rapidly evolving circumstances. When they do invest, they feel unsure about how and where to deploy their promotional resources.
While there is no silver bullet or easy answer, we have put together a list of six key factors that companies should pay attention to in order to win through these turbulent times. As marketers cannot rely on old models, and circumstances continue to change rapidly, the factors outlined below are already providing a framework for post-pandemic recovery for many retailers.
- Footfall-to-sales conversion
In the pre-pandemic era, marketing activities were based on the assumption that a certain percentage of visitors would convert to purchase. However, a 50% lower footfall might not necessarily translate into 50% lower sales. Marketers will be dealing with fewer store visits, but greater numbers of customers are likely to be going into a store ‘on a shopping mission’ rather than just to browse. Constant monitoring is essential to get a feel for how the situation will evolve and whether trends will revert back.
- ‘Mission visits’
As browsing has mostly moved online, many retailers might be tempted to invest their promotional resources in this higher percentage of ‘mission visits’. However, a thoughtful analysis of new trends and behaviours, as well as of the nature of the business, is much needed before doing so. While all businesses have felt the effects of the pandemic, some such as grocery, pet food and chemists, have remained robust and their footfall to purchase conversion is unlikely to change radically. Retailers have also registered increased interest in, and rising demand for, craft, DIY and at-home activities – a trend which is likely to continue in the near future, as consumers spend more time at home. In the new normal, consumers may have different perspectives on ‘necessities’ and ‘discretionary purchases’ – especially in light of restrictions – and understanding this is critical to future strategy.
- Business agility
At a time when there is no precedent to draw upon in terms of sales cycles, agility remains the key to adapting to changing customer interests, and keeping up with emerging opportunities. Though consumers are seeking ways of unwinding and relaxing, leisure activities are limited by the circumstances. With travel corridors constantly opening and closing doors, and constraints on household budgets, going on holiday is not as feasible as before. Such a change might prompt, however, a resurgence of retail spending with home leisure and entertainment activities on the rise.
- ‘Location, location, location’
While high street retailers might benefit from consumers taking staycations, retail and leisure businesses near concentrated office spaces will suffer as companies increasingly migrate to remote working – at least for the near future. Now more than ever, location is a pivotal factor for retailers. As a sudden change of location is not realistic, companies will have to think strategically about where to place their promotional activities and loyalty incentives.
- Supply chain management
The pandemic has certainly put the supply chain to the test. For instance, a volatile demand for white goods – as well as the challenges of delivery and installation – has led retailers to become more reluctant when it comes to taking orders in advance; at the same time, manufacturers are more cautious about supply. Marketers might wonder how to fulfil customer demands at a time where instant gratification may not be doable. There is little doubt that honesty remains the best policy. Customers are more inclined to stick to a retailer that they trust and that has proven to be reliable. Increased collaboration between marketing and supply chain management will be key to ensuring clear communication with customers about when they can expect their products.
Even when it comes to discounting, old models might not necessarily apply in the current circumstances. Discounting might be the best solution to move existing stock at speed as a result of disruptions to expected seasonal peaks of demand. However, at a time of reduced availability, is discounting the best strategy when you have products that others do not? In fact, ensuring reliability and continued supply may prove more beneficial than going up against a lower-priced competitor. Ultimately, discounting strategy must focus on keeping high-value, high-loyal customers (current and projected), and incentivising them to continue spending, more, more often, and on a wider share of wallet. This strategy will carry companies through the current crisis, and long afterwards.