Here’s a conversation that has occurred in my home, more times than I’d care to admit since March.
My husband: “We just got a few packages. Did you order something from Amazon?”
Me: “Uhh...I probably did, yeah.”
I admit I was a big online shopper pre-pandemic. One of my favorite lazy night activities is scrolling through my Hautelook app and finding more items to pack my closet with. A cute pair of leather boots for 60% off, yes, please!
But, in today’s quarantined, work-from-home world (thanks, COVID-19) even MY online shopping habits have increased.
It started out innocently enough. It was simply safer to order the standards online vs. going out to the store. Then, I started working from home full-time and needed a real workspace. So, I ordered a desk and a new office chair.
As it got nicer out, my husband and I were spending a lot of time on the balcony. Naturally, that meant I had to make that space cozier with an outdoor rug and new plants.
You can see how this is a slippery slope! The thing is, I’m not alone. The pandemic has not only changed how we all live, it’s changed how we shop.
Now, as we head into the busiest shopping season of the year, retailers have had to make some big changes to their holiday marketing strategies. One of the biggest pivots they’ve had to make is how to spend their ad dollars.
In 2019, there were five retailers that invested over $1 billion in advertising, all ranking in the top fifty in total ad dollars: Walmart ($2.75 billion), Target ($1.65 billion), Macy’s ($1.33 billion), Kohl’s ($1.16 billion) and Home Depot ($1.09 billion).
The same year, Wayfair ranked #50 in spending at $932 million, a 40% increase from 2018.
Amazon ranked first overall, with an ad spend total of $6.88 billion.
How much of these billions of dollars are spent during the holiday season? According to media analyst Jon Swallen, “30% to 35% of retail advertising budgets are allocated in the fourth quarter with smaller retailers allocating more.”
To give you an idea of how much that is, 30% of $1 billion is $300 million.
Holiday shopping will look different this year... and so will advertising
There’s no doubt that in-store shopping will take a hit this holiday season, as COVID-19 continues to surge across the country. However, it’s expected that e-commerce will help make up some of the difference for retailers.
Other than spend, the other big change we will see in holiday advertising this year is messaging.
Advertisers have to be extremely sensitive to the state of the world. The holidays won’t be filled with family gatherings, office parties, or the typical activities we all know and love. As a result, retailers need to be careful to not come off as tone-deaf.
So, if you’re a smaller retail business, it’s important to be realistic about your expected ROI when determining your ad budget.
It’s still the holidays!
If we’ve learned anything this year, it’s that we can all adapt to this ever-changing environment.
While I used to love grabbing a peppermint mocha at Starbucks and walking through magically decorated department stores in search of the perfect gifts for my friends and family, I will find new ways to enjoy holiday shopping this year.
Just imagine the Instagram story I can create with a peppermint mocha in my twinkle light-filled living room while I shop online! (Remind me to send that user-generated content idea to Starbucks!)
In all seriousness, the ad industry may not spend as much or see the growth they usually would, but brands can still make a massive impact this holiday season.