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Brand Strategy E-commerce Cost of Living

Preparing for ‘peak season’ during economic hardship: 8 basics ahead of Black Friday

By Lotte Hill, Paid Media Camapign Manager

RocketMill

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September 5, 2023 | 7 min read

‘Peak season’ – the time of year when prices, purchases, and promotions all rise – this year comes during a time of difficulty for many of us. To navigate this tricky time, RocketMill takes us back to brass tacks.

A person struggling to lift a heavy canvas bag

How can brands navigate this year's 'peak season' amid so much economic hardship? / Mediamodifier via Unsplash

Consumer spending shifts, decreases in disposable income, interest rate hikes, and borrowing costs have been widely documented this year. The squeeze on household spending on non-essential products and services has been clear to many advertisers, reflected in drops in search demand, declining conversion rates, and reduced basket values. Not only are customer acquisition costs rising; businesses are also facing unrelenting challenges in operational costs and supply chain pressures.

The result? Brands are sharply focusing on profitability and efficiencies over unprofitable growth and chasing revenue.

No more big discounts?

As peak season approaches, the question for advertisers is whether the usual tactics will remain best. Black Friday and Cyber Monday have historically seen eye-watering discounts ranging from 30-90% in the fight for revenue and ‘growth at all costs’. This year, will we see advertisers double down on this? Or will we see a peak period where brands fight the appeal of hyper-discounting and instead lean into their value proposition? We’ve seen this strategy work for the likes of Patagonia, which has famously and unapologetically resisted the Black Friday frenzy.

Businesses may feel they’re in a ‘damned if you do, damned if you don’t’ scenario as we approach Q4. What’s clear in digital marketing is that peak is not the time for testing. We must stick to what we know, taking learnings from Q1-3.

The fundamentals will help to prepare and navigate through this trading period and the unknown challenges it may bring.

1. Use your own data

As with all forecasting, the best data is your own. Plot out previous years’ performance, looking at metrics like cost per click, cost per thousand impressions (CPM), brand impressions, site sessions, and conversion rates. This will help you to visualize any obvious trends, taking into account post-pandemic fluctuations.

2. Lean on your platform and agency reps

It’s easy to take an insular approach and become obsessed with what you are seeing (or have seen) in your own activity. While that is important, having an eye on the wider world will limit unexpected challenges. Platform and agency reps are best placed to provide insight on how consumers are behaving on their platforms – and on what competitors are doing.

3. Leverage the tools available to you

With a frequent stream of data feeding into them, and advancements in machine learning improving their ability to adapt, making use of in-platform tools will provide reach and cost estimates as a benchmark from which to start your forecasting and budgeting.

4. Plan and playback

By submitting and approving media and budget plans for Q4 during September, you can use your future planning sessions to playback the strategy with enough time for feedback. You can then enter peak season with a solid action plan and alignment from all stakeholders.

5. Define your objective

Clarifying your desired outcome will help determine where you put your media spend, whether you're looking to capitalize on Cyber Week sales, or competing with an influx of Cyber Week promotions as a business that caters to winter demand.

With platform costs increasing from October, if you plan for above-the-line (ATL) media to support your digital activity, buying inventory at least three months before Q4 will mean huge cost savings.

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6. Know when to turn off

There’s no reason to compete with the influx of advertisers over expensive weeks or weekends of the year if your audience is disengaged. Consider switching off activity if historical data indicates poor performance; save your budget for the return to work and school when ‘back to work’ mode sets in across your target consumer.

7. Plan for the unknown

The cost-of-living crisis poses an unknown challenge. Having a pre-agreed contingency will avoid panic and knee-jerk reactions.

If volume is falling short and cost-per-action (CPC) is increasing rapidly to unsustainable levels, know where you’re going to pull back. Plan which campaigns are essential to performance, and which can be dialled back to drive better efficiency.

8. The time is now

There’s no time like the present. Now is the time to start your preparations, engaging stakeholders, defining objectives, modeling scenarios, and analyzing historical performance.

Behind all the numbers, though, are human beings. Consumers are faced with hardship, and demonstrating compassion – for brands and consumers alike – during these times should take priority.

Brand Strategy E-commerce Cost of Living

Content by The Drum Network member:

RocketMill

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