Essential Marketing Techniques for Small Retail Success

Essential Marketing Techniques for Small Retail Success

In a nutshell, the forthcoming season is poised to be an unprecedented opportunity for online retail growth. The question at the forefront is: Are you equipped to leverage this potential windfall? It’s advisable to escalate your advertising expenditure without delay and begin orchestrating a diverse array of promotional initiatives.

As we advance towards the period, maintaining flexibility to adapt spontaneously—and perhaps frequently—as global circumstances evolve will be crucial. As a retailer, you are likely already in the throes of meticulous preparation for the 2024 season. This includes predictive analysis of sales for November and December, finalizing purchase orders, and stocking up inventory for this critical period, which for many constitutes a significant portion of their yearly earnings.

However, it’s essential to acknowledge that plans cannot be set in stone—nor should they be. This year, unique in countless aspects, has ushered in unparalleled uncertainty, making previously reliable market forecasts less relevant.

A confluence of factors—such as consumers’ reluctance to shop in physical stores, a heightened unemployment rate, pervasive economic unpredictability, and rapidly evolving consumer preferences—complicates even the most tentative of forecasts. This is true even for large retailers backed by teams dedicated to future predictions. So, where does that leave the small retailer?

Agility is the keyword here. Unlike their larger counterparts, small retailers possess an inherent ability to adapt swiftly.

Consider the realm of marketing. It’s indisputable that digital channels will be crucial for sales in 2024. The preceding months have marked a pivotal era for e-commerce: Between April and June, online sales surged by 44% year-over-year, with e-commerce now accounting for nearly 21% of total retail sales, up from about 15% in the same quarter of 2019. This increase of 6% in the overall context of a $3.7 trillion retail market could significantly benefit up-and-coming retailers.

Moreover, there’s a noticeable recovery in consumer confidence. This shift underscores the necessity for small retailers to be proactive and agile in their marketing strategies, embracing digital avenues not just as an alternative, but as a primary conduit for reaching consumers and driving sales in an uncertain yet potentially lucrative season.

“As we begin to witness a shift towards positivity and recovery in the global landscape, there presents a golden opportunity for smaller brands and retailers to scale significantly,” expressed Matt Rhodus, the Director of Strategic Initiatives and Industry Principal at Oracle NetSuite. He noted that while several large-scale retailers face challenges or decline, the increasing consumer shift towards online shopping has led to the discovery and growth of numerous new brands.

In this evolving marketplace, it’s imperative for smaller sellers to strategically utilize their resources to stand out amongst competitors boasting substantial marketing budgets, sometimes reaching eight or nine figures. Here are five strategies that enable retailers, who possess more ingenuity than financial power, to amplify their sales in the current environment.

Maximizing Your Marketing Budget: Five Essential Strategies for 2024

1. Strategically Increasing Your Digital Ad Spend Before Rush

Challenge: The season traditionally ignites fierce competition among retailers, driving up the costs of digital advertising significantly. As advertisers face increased demand for keyword bids, the cost per click can surge by over 100%. The year 2024 is poised for even sharper increases due to ecommerce’s escalating prominence. Major brands, reallocating funds typically reserved for physical advertising mediums such as billboards or mall banners, are turning their attention to digital giants like Google, Facebook, and Amazon. Additionally, the push towards ecommerce isn’t the sole factor inflating digital ad prices. Retailers, especially those who have traditionally leaned on physical stores and are now overstocked due to prolonged closures, are expected to advertise aggressively with significant discounts to clear inventory.

Solution: To navigate this, initiating digital advertising campaigns earlier than usual and allocating a more substantial portion of your budget pre-Thanksgiving is advisable. Advertising costs reach their zenith around Black Friday and Cyber Monday, maintaining elevated levels through December. An early start could secure more favorable ad rates and better visibility during the initial shopping frenzy.

Drew Cook, CFO and Head of Operations at the apparel brand Pact, emphasizes strategic planning to avoid reliance on heavy marketing expenditures during the November and December peak. Similarly, For Now, a retail incubator that promotes small brands, plans to build momentum early in the fall to circumvent the inevitable ad rate hikes. Co-founder Kaity Cimo shares their strategy of promoting their online store vigorously at the start of fall, then pivoting to more cost-effective local advertisements as the season approaches, aiming to draw customers into their physical location.

The goal is to make your brand a familiar name to shoppers early in the season, leveraging ecommerce trends to enhance brand awareness before the competitive and expensive marketing landscape fully sets in.

2. Adapting Promotional Strategies to Navigate Uncertain Economic Conditions

Challenge: This season is marked by unprecedented economic uncertainty, potentially reshaping consumer behavior significantly. According to Matt Rhodus, consumers are particularly eager for deals during uncertain times, compelling retailers to consider more frequent promotions, which could narrow profit margins. For instance, the retail incubator For Now previously only offered sales when their brand partners did the same on their sites. However, they are contemplating a significant sale in September exclusive to their platform, providing an opportunity for brands to offload stagnant inventory.

Conversely, some businesses face inventory shortages due to supply chain disruptions or unexpected sales surges. Pact, for example, experienced inventory shortages but anticipates normalization by the end of September. Retailers less fortunate face a dilemma: reduce promotions to conserve inventory or cater to consumers’ reduced spending power with more sales?

Solution: The key is to meticulously plan for various sales performance scenarios—whether they fall below, meet, or exceed expectations. This involves collaborative strategizing to determine the optimal response for each outcome. If sales and inventory turnover are healthy, a singular Cyber Monday promotion might suffice to meet goals without overstock issues. Should sales decelerate in Q4, consider launching additional promotions.

Drew Cook highlights pricing as a crucial tool for influencing sales and managing inventory effectively. For agile retailers, setting benchmarks related to sales performance and inventory levels can guide promotional actions. For example, if only 70% of Q4 sales targets are met by December 10th with high stock levels, initiating a 40% discount on specific categories may be prudent. Conversely, if sales unexpectedly peak in mid-November with low stock on popular items, scaling back a site-wide sale to discounts on slow-moving stock could be more strategic.

This season, promotional strategy adaptability is paramount, particularly for those grappling with inventory sourcing challenges. Retailers may need to make more spontaneous decisions, leveraging best practices to maximize conversions with available stock.

3. Deepening Engagement with Your Current Customer Base

Challenge: In an era where marketing efficiency is paramount, approximately 21% of retailers have reduced their marketing budgets due to the pandemic’s economic impact. Even those maintaining their budget levels are seeking to optimize every dollar spent, focusing intensely on the return on investment (ROI).

In light of this, here are insights on enhancing your return on ad spend (ROAS).

Solution: Leverage the power of existing customer relationships to maximize marketing efficiency. It’s a well-established fact in the retail industry that retaining an existing customer is approximately five times less costly than acquiring a new one. These customers are already acquainted with your brand and likely to have a higher lifetime value.

“Re-engaging customers who have previously shopped with you, offering them incentives to make another purchase, is a more fruitful strategy than attempting to win over new ones,” suggests Matt Rhodus. Utilizing the contact information of past purchasers, such as names and email addresses, for targeted marketing campaigns can be a highly effective and cost-efficient approach.

For instance, sending tailored emails to customers about upcoming sales, or reminding them of items they left in their shopping cart, are strategies that require minimal effort but can yield significant rewards.

The season presents a prime opportunity to rekindle relationships with inactive customers who haven’t made a purchase in over a year. A personalized email highlighting a special sale, or a Facebook ad featuring products similar to their past purchases, can reignite their interest in your brand. Offering these customers exclusive discounts or a special gift with their purchase can further enhance their engagement and encourage repeat business.

For Now, which rapidly pivoted to an online presence when its Boston storefront was shuttered by March’s stay-at-home mandates, has strategically directed the bulk of its advertising budget towards remarketing campaigns. These campaigns are designed to re-engage individuals who have visited its website, regardless of whether they’ve made a purchase. Additionally, Cimo is preparing to reach out via email to patrons of its seasonal Nantucket store—a popular spot off Massachusetts’ coast—aiming to extend their market reach nationally.

“Concentrating efforts on customer retention through targeted email marketing is a tactic I find particularly promising,” Cimo explained. “We’re exploring various ways to segment our customer list, aiming to offer personalized incentives to previous buyers to encourage their return.”

Discovering innovative methods to connect with existing customers remains a priority. Time-tested strategies from the previous year, like demonstrating your brand’s commitment to meaningful causes or leveraging ‘micro-influencers’ for product promotion via organic posts rather than paid advertisements, continue to hold their value.

And on the topic of organic content…

4. Unlocking the Potential of Social Media in Retail

Challenge: In an era where digital presence is crucial, retailers must adapt to meet consumers in their increasingly online world. However, with the saturation of digital ads, including the barrage of political advertising around election seasons, consumer ad fatigue is a real challenge. The effectiveness of traditional digital advertising is waning, as evidenced by the fact that, on average, only one in one thousand display ads receives a click, according to Invesp. This scenario underscores the necessity for marketers to explore new avenues to captivate their audience’s attention.

Solution: Emphasizing investment in social media is a pivotal strategy, complemented by sustained efforts in email marketing and other digital channels. With nearly three-quarters of U.S. adults engaging with social media platforms, and Instagram emerging as a vital channel for retailers, the opportunity to connect with consumers has never been greater.

Leslie Hand, Vice President of Retail Insights at IDC, notes a shift in marketing strategies towards online and social channels, prompted by the decreased physical foot traffic and the changing objectives in driving consumer engagement. Retailers, both new to social media advertising and those already established, are encouraged to augment their social media advertising budgets. For instance, For Now has reported a significant return on investment from its foray into paid Instagram and Facebook advertisements. Moreover, the brand is leveraging a network of influencers to promote -themed gift kits—a strategy that has proven beneficial for engagement and sales.

Beyond paid advertising, organic social media content serves as an invaluable, cost-free tool for enhancing brand visibility and engagement. Cox & Cox, a British online home décor and furniture retailer, has experienced a 25% growth in its Instagram following in just six months, an expansion they anticipate will positively impact their season sales. Similarly, For Now utilizes its 11,000-strong Instagram following to engage with customers, gather feedback, and gauge consumer interests, which recently highlighted loungewear and candles as trending product categories.

The authentic connection fostered through social media, particularly for smaller retailers, enhances “social proof” and fosters a community willing to promote the brand on their personal channels. This grassroots level of promotion is not only cost-effective but also builds a loyal customer base more effectively than traditional, impersonal advertising methods could hope to achieve.

5. Adapting Through Data-Driven Insights

Challenge: The retail landscape is undergoing rapid and unprecedented changes, highlighting the importance of adaptability. The feedback from For Now’s community illustrates the pandemic’s significant impact on consumer preferences—shifting from formal attire to casual wear and outdoor products, a trend expected to influence shopping behaviors. This shift necessitates retailers to rethink their product assortments and promote items that align with the current lifestyle of consumers under quarantine.

“Consumer behaviors are poised for significant transformations in the upcoming quarter and are expected to continue evolving over the next nine months,” stated Katharine ReQua, co-founder of For Now. This unpredictable environment leaves retailers without a reliable model to forecast sales across different categories for the remainder of 2024 and into the early part of the next year, compelling marketing teams to remain vigilant and responsive to real-time data.

Solution: Flexibility and responsiveness become the cornerstones for navigating these turbulent times. Retailers are encouraged to enter the bustling season with an adaptable mindset, drawing inspiration from companies like Cox & Cox. Their team acknowledges the necessity for flexibility and readiness to implement changes as the situation evolves.

“The upcoming season will be dynamic for us,” Aynsley Peet, head of ecommerce at Cox & Cox, shared regarding their marketing strategy this autumn. “We may need to be bold and initiate changes we hadn’t planned on. However, the key is to make these adjustments swiftly and decisively.”

Retailers that closely monitor performance metrics and are prepared to pivot their strategies based on emerging trends will be better positioned to meet the changing needs and preferences of their customers. This approach not only ensures relevance but also enhances the potential for success in a highly competitive and fluid market environment.

Meticulously Monitor Sales Trends for Agile Response

Proactive Observation and Adaptation to Sales Dynamics: In the ever-evolving retail landscape, keeping a vigilant eye on sales trends becomes paramount. The ability to swiftly pivot and capitalize on emerging bestsellers can significantly impact a retailer’s success. Daily evaluation of the performance across various marketing channels is crucial, enabling you to dynamically adjust your advertising spend to maximize efficiency. Embracing creativity in how you engage with both new and existing customers can open up new avenues for growth.

“We maintain a weekly pro forma and delve deep into our performance metrics,” shared Katharine ReQua. “Our focus is continuous improvement and optimizing our strategies to meet the market demand efficiently.”

Leveraging Creativity for Brand Building on a Budget: Establishing and enhancing brand visibility doesn’t necessarily require a hefty marketing budget. With innovative approaches and creative thinking, you can achieve notable brand awareness. The essence lies in utilizing strategic insights gleaned from your sales and marketing data to inform smarter, more effective decisions. By doing so, you can not only adapt more swiftly to the market’s demands but also carve out a distinctive presence in a crowded marketplace, all while adhering to budgetary constraints.

Essential Insight for Smaller Retailers: Seizing the Opportunity

The Core Message: Optimism and Strategy for the Season For smaller retailers, the message to their teams should be clear and inspiring: The 2024 season is not just another sales period; it’s a significant opportunity. Businesses that have witnessed a surge in ecommerce orders in recent months are positioned to extend this growth into the season with strategic marketing efforts and exceptional customer service. Meanwhile, for those yet to experience such success, the outlined strategies offer a roadmap to pivot effectively, enhancing performance without depleting resources.

Agility: The Key to Fourth Quarter Success If there’s one principle to underscore for your team as the fourth quarter approaches, it’s agility. The ability to adapt swiftly to evolving market demands, customer preferences, and logistical challenges will be crucial across all aspects of the business—from marketing and operations to customer engagement. This adaptability will not only facilitate smoother internal processes but also enhance the customer experience, ultimately setting the groundwork for a successful season.

In the competitive landscape of retail, agility will be the defining characteristic that distinguishes the leaders from the laggards. It empowers retailers to navigate the unpredictable waters of the season, leveraging challenges as opportunities for growth and differentiation. Encourage your team to embrace flexibility, responsiveness, and innovation, and watch as these qualities transform challenges into victories.

Essential Marketing Techniques for Small Retail Success
Article Name
Essential Marketing Techniques for Small Retail Success
Learn how small retailers can utilize marketing techniques to boost sales and navigate challenges with agility.
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ABJ Cloud Solutions
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