Headwinds facing marketers this year include:

  1. Media costs that have not reduced substantially from 2021’s peak in November & December
  2. As much as 10% inflation across the US
  3. Growing fears of an economic recession
  4. Consumer over-buying from 2020 through mid-2022
  5. Businesses’ over-buying of inventory due to supply chain fears and what appeared to be an increasing consumer demand
  6. Physical retail will return to near pre-pandemic shopping levels, putting additional pressure on ecommerce-only businesses–Google is predicting a 12% increase YOY in retail apparel sales vs. -2% decline for online
  7. Expectations of brand responsiveness at an all-time high–HubSpot poll found that 90% of consumers look for an immediate response from a brand when they have a customer service question
  8. More and more audience targeting restrictions in social advertising, making it more difficult than in previous years to rely on this data for target market accuracy

The Dreaded “D” Word (Discounts)

Recent data from Morning Consult has shown a spending rebound from a low in May 2022 to a recovery in July. However, don’t let that optimistic data fool you. August over July spending was essentially flat and was supported by higher-earning US Adults. However, even high earners are becoming more budget-conscious, showing signs of reducing spending overall and trading down to less-pricey options. So, if we are not offering aggressive discounts this year, we may be shouting into the wind. In fact, Google predicts that 81% of consumers will wait for a sale or promotion to purchase this season.

For brands concerned about damaging their brand through discounting, understand that you may also be risking either being a non-factor in the buying that will occur, or at worst, you will be considered tone-deaf by previously loyal consumers who are actively trading down to save money.

We predict that 50% off will be the median discount that we will see for goods and services this year with even more aggressive discounts on things like higher minimum AOV’s, free shipping and discounts on bundles.

Consider Launching Early

62% of consumers started shopping earlier in 2021, reaching peaks in October. So, even with all the discounting that will be rampant during this year’s holiday season, recall that consumers overbought for the past two years and they’ll be doing two things: First, more will be sticking to a budget or using credit. Second, they’ll be asking if they really need what we are selling. The early offerings will grab larger shares of the consumer holiday budget and those who wait too long will have to rely on credit purchase decisions.

Brands willing to begin promotions early will still race against the clock to get ahead of Amazon. With the announcement of an additional Prime Day Early Access Sale on October 11-12, DTC brands will have to take this into account to minimize it disrupting their own promotion schedules.

Lastly, while media costs remain high, pure supply and demand will further increase budgets as we move toward Black Friday and Cyber Monday dates. Launching early could allow brands to scoop up some lower-cost sales.

We’re recommending to our clients that we build audiences well in advance of promotion launches for cheaper CPMs on awareness. This means running evergreen creative 2-3 weeks ahead with the intent to retarget them during our offer.

Alternative Payment Plans

If not already offered, DTC brands who offer alternative payment plans like Sezzle and Affirm will see higher overall sales as consumers try to make their budgets extend longer. Consumers will gladly pay monthly payments to meet their holiday shopping goals. Consumers get what they want and businesses get their sales.

Creative Is King – Like Never Before

Expect competitors to pull out all the creative stops – including both top-performers and brand-new seasonal work – to stand out from the noise. The creative strategy we’ll recommend for each client depends on their performance and production history, but a few elements apply across the board.

First, as with audience creation, it’s critical to get started as early as possible to be fully prepared. Second, consider A/B testing creative in advance for more confidence in what you’re running by peak promotion times. Lastly, take stock of recent successful organic and user-generated content to identify any untapped opportunities to influence preference over competitors.

Creative Recommendations

  • Brand consistency is key to creating a holistic brand experience.
  • Creative executions and subsequent user experience should leverage brand materials.
  • On-brand lifestyle and product photography grab attention and are engaging.
  • Striking visual content creates more impact. Animation and video tend to be more engaging on platforms.
  • Develop clear communication hierarchy to lead users on a path to purchase. Make sure to consider where users are ending up on click-through.
  • CTA consideration is important. Less is more. Make sure next steps are clear. “Learn more” “Buy now.”

Backup Offers

We will be urging our clients to have backup offers ready to go in the event we are not seeing the results we expect or need for the business. Backup offers can be discount alternatives, alternative hero products or bundles or any combination of these. Historically, we like backup offers in the event of inventory sell-outs. While we hope that for our clients this year, this strategy is more about rapid response to address lackluster sales performance.

Set a Budget, Prep a Strategy, and Align on Goals

2022 was the year of the “reforecast”. As we get closer to the “Super Bowl of Ecommerce,” it’s extremely important to be budgeting and setting goals and expectations on performance marketing that align to closing out the year strong. If you’re unsure of which direction to go, our team is primed to lead these discussions: whether it be about customer acquisition, profitability, product liquidation, or maximizing top-line revenue.

Capture In-Platform Shoppers

Social media channels are now stand-alone shopping platforms. So, it’s time to embrace by testing in-platform shopping campaigns, including shoppable ads and stories. Every platform is experimenting with how to integrate “buy” buttons or ecommerce conversions in-platform. The younger your customer target, the more we’ll encourage the exploration of this tactic, with approximately 37% of shoppers ages 15-22 having used the “buy” button on social media, and 30% having purchased something from a shoppable social media story.

In closing, planning and preparation are going to be the keys to a successful Q4 and Holiday season.

We started planning in August at Lamark and we are looking forward to partnering with our clients and driving success this year for each other. It's not too late, to catch up. Feel unprepared? We can help.

Questions? Reach out to us.