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Our insights > Benchmark (noun): a point of reference from which measurements may be made
Insight

Benchmark (noun): a point of reference from which measurements may be made

author

Sorcha O'Boyle

date

Nov 12, 2020

read time

4 minutes

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37% of customers plan to spend more this holiday season than last year.*

With that in mind, it’s time to talk about benchmarks.

What are the best retail brands doing differently to you?

As with many things this year, expectations and forecasts are shifting for a lot of our clients. Whether they be homewear, clothing or beauty brands, most marketers are seeing different AOVs compared to the same period last year and the breakdown between online and store revenues has become a true moveable feast.

Add to that the challenge of trading through another lockdown (though with the possibility of a vaccine on the horizon!) and it’s not surprising that marketers are struggling to figure out which way is up.

That’s why we’ve pulled together some benchmarks to share what the best brands are experiencing and help you to offset the uncertainty we’re all still getting used to.

October: what happened and what does it mean?

Direct revenue finished at +21% in October, an increase on September and an indication (as if anyone needed it) that optimising online performance will be key this gifting season. But online channels aren’t the be-all and end-all – store performance bounced towards the end of October to finish at -9% as store-dominant customers made the most of the pre-lockdown shopping days.

What does this tell us?

Put simply: online channels are crucial but customers still love stores (and stores in market towns in particular).

If you’re an online-only brand, make customer service support messages more prominent and demonstrate to your customers that you’re there to help 24/7. Focus your messaging on the ease of your gifting proposition to offer security, particularly to your older customer cohorts who may require reassurance when buying from a brand they’ve never seen on the high street.

If you have stores, use your store data to speak directly to your in-store customers and target them with specific messaging across the relevant channels. Show them how easy it is to order online with you and remind them that you’ll be ready to welcome them back in December (regional variances depending).

Speaking directly to your retail customers online is crucial. Nothing displays a higher intent to buy than walking into a store so make sure those customers are getting the attention they deserve.

AOV

Some brands are experiencing a drop in AOV. For some, this is due to a combination of a drop in item price and a decline in the number of items per order. As they come to terms with the second lockdown, customers are willing to invest more time in shopping around for the best deals and are only buying those items they really need.

To offset this, brands should focus on recruiting greater volumes of new customers who are likely to have a high life-time value. Use legitimate interest to maximise opt-ins and invest in your retargeting campaigns to convert recent visitors with timely, relevant triggers. Customers recruited during the first lockdown displayed very high loyalty rates so it will be interesting to see what proportion of those first lockdown recruits buy again in the coming weeks and, equally, whether customers recruited during this lockdown display similar loyalty levels.

Other brands are seeing the drop in AOV being balanced by an increase in the number of items per order – if this sounds like you, you should adjust your allowable cost per order and ROAS targets based on current customer spend levels. If we’ve learned one thing in 2020, it’s that adaptability is key!

4 key actions

1. Be relevant to the times

Adapt product messaging to the ‘at home’ audience and emphasise the ease of delivery and your exceptional customer support.

2. Optimise performance marketing spend

Adjust spend to reflect allowables and changing CPAs/ROAS​.

3. Maximise conversion from increased web traffic (customers are also browsing your competitors’ sites)

Maximise opt-ins by using legitimate interest​ and investing in retargeting campaigns to recent visitors.

4. Speak directly to retail customers

Communicate with store-dominant customers with simple messaging on relevant online channels and make sure they feel cared for. ​

 

We’re coming to the crunch time of this year’s peak season – good luck!

Join us for a quick-fire webinar on the 8th December (10am) where we dig deep into the tips, tricks and hacks you need to hit the ground running in 2021 – you can sign up here.

And if you want to chat about anything you’ve read here or have questions about how your performance compares with these trends, drop us a line at hello@more2.com!

 

 

*Source: Periscope by McKinsey, November 2020.

author

Sorcha O'Boyle

date

Nov 12, 2020

read time

4 minutes

share