Retailers can anticipate more of the same when it comes to holiday discounting, as well as wild risks from some brands without much to lose. Here’s a closer look at what to expect:
It’s Amazon’s market share now
Not too long ago, retail was obsessively focused on how Amazon was eating into everyone else’s market share. Well, Amazon owns it now — the game is reversed. Every major retailer is going to be focused on how it can steal market share from Amazon this year.
And Amazon isn’t going to back down from that challenge.
Nike’s product rollout on Amazon portends even more major shakeups. Retail apparel is notably one of the few areas Amazon has struggled to gain traction, but that tide might be turning. If Nike’s relationship with Amazon expands, it could open the floodgates for other retailers that want to explore third-party operations with Amazon.
Amazon CEO Jeff Bezos always finds a way to surprise the industry. Many were surprised at the acquisition of Whole Foods Market, but it shouldn’t shock anyone if a holiday expansion of Amazon’s apparel line is in the works.
Walmart’s response
Walmart is one of the few brands that has held its own against Amazon. Walmart’s holiday response should directly compete with some of Amazon’s bigger initiatives, such as shipping — rivaling it in both speed and price.
Shopping options will also be highly marketed — reserve in store, buy online, pick up in store and ship from store will be consumer expectations for the major retailers.
Will it be enough to draw customers away from Amazon?
The promotional calendar is going haywire
If you’re a marketer, don’t expect to get much sleep. Promotional changes are coming fast and often. Everyone is going to play catch-up to the steepest discount yet again.
The build-up is also going to be quicker this year. Expect deeper discounts well before Black Friday as brands try to pick up margin earlier in the quarter before other brands start dropping prices.
Creative will take a backseat to urgency
Retail has made progress lately in expanding the creative purview. Lifestyle imagery is often focal, with toned-down promotions and more minimal lockups. That will disappear this holiday. Expect to see those grotesque, giant 40 percent, 50 percent, and even 60 percent off lockups in creative again.
The urgency to pick up every dollar is going to dictate this year’s creative, not branding, lifestyle or any other measure of creative ingenuity.
It’s not necessarily rational to think the bigger number is flat-out more effective, but rationality isn’t in play. At the end of the day, people respond to promotions — it might denigrate the brand long-term, but survival is measured in quarters right now, not years or decades.
Innovative shopping experiences vs. customer service
Two areas are going to drive some very interesting shopping experiences: the urgency to drive store traffic and the advancement of immersive shopping experiences such as AR/VR and digital signage. A segment of retailers searching for a way to stop the bludgeoning of store traffic will invest heavily in those technologies to bring customers in the door.
While customers like more immersive experiences, it isn’t going to drive a large-scale change in foot traffic, though. Only service can do that. E-commerce is winning out because of convenience. To get people back in stores, brands need to increase service tailored to the individual customer experience.
The big winners will be…
Advertisers and publishers.
The competition for ad space — digital, print and television — is going to be cut-throat. Pressure from leadership to own the holiday season will push marketing attempts at owning the digital space, buying not only their relevant terms, but also those of their competitors to increase market share.
Even brands that are typically more cautious with the ad budget will need to take some risks to ensure that they don’t get drowned out by their competition. Expect advertising prices to skyrocket, and expect brands to be willing to pay the premium driven by their urgency to generate profit.
All of that adds up to some heavy coffers for advertising agencies and publishers.
Evolution driven by necessity
Some analysts say retail is dead. Others have their heads in the sand and say retail is fine; it’ll all work out long-term. The reality is that retail is evolving. Dire times of great need are what drive evolution — not times when everyone is sitting fat and happy on their profits. 2017 is a clear case of natural selection — survival of the fittest.
Innovate and adapt — or become extinct.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.
