Retailers Plan to Ramp up Promotions This Holiday Season as Inventory Surplus and Consumer Confidence Weigh on Holiday Plans

BY Business Wire | ECONOMIC | 10/06/22 09:00 AM EDT

New survey from CommerceNext and CommX finds retailers concerned about margins and marketing ROI heading into the holiday 2022 season

NEW YORK--(BUSINESS WIRE)-- After a year of repairing supply chains and staffing up warehouses, retailers are heading into the 2022 holiday season generally optimistic but facing new challenges that include inflation-spurred consumer attitudes and marketing ROI difficulties, according to a new holiday benchmark survey conducted by CommerceNext in partnership with The Commerce Experience Collective (CommX).

The study, conducted in August 2022, includes data from 100 retail and brand executives from companies of various sizes, who were surveyed to determine industry expectations for online sales this upcoming holiday season and this year?s favored marketing strategies. The report demonstrates that retailers are preparing to face stiff competition head-on by turning to promotions, email and SMS, paid search, affiliate marketing, and a mix of shipping incentives to get consumers to shop this season.

Most merchants expect this year?s holiday sales to outdo their 2019 numbers, but not necessarily those from holiday 2021, which was a record year for most, leaving many optimistic but also cautious about profits. One way retailers are tackling excess inventory this upcoming holiday is through promotions. The report found that 32% of respondents will increase the number of promotions. In contrast, the 2021 report found that only 13% of respondents increased promotions. As a result, promotions will most likely claim a much larger role in acquisition strategies this year compared to last year.

A majority of retailers are also concerned about privacy changes impacting their ability to target customers and generate the same marketing ROI from advertising. ?Competition is tight this holiday season, as many brands face more expensive customer acquisition costs,? said Veronika Sonsev, Co-Founder of CommerceNext. ?Privacy changes have really hurt paid social by limiting targeting and measurement, and for the first time in years, we?re seeing affiliates and partnerships rise to the second most used marketing tactic after paid search. Ultimately, attribution will be the key to expanding marketing channels. Retailers must go beyond last-click ROAS and implement incrementality testing and/or media mix modeling in order to successfully scale marketing.?

As retailers ramp up promotional strategies, they are also focusing more on retention marketing strategies. While email marketing still remains the top and most reliable retention strategy, SMS continues to gain popularity with nearly two-thirds of merchants relying on their SMS programs to beef up their holiday sales. ?SMS, which is often viewed through the same device as email, marketers can embrace an omnichannel strategy that seamlessly connects the buying journey, ensuring shoppers have a singular brand experience even as they shop across multiple channels,? said Brian Walker, Chief Strategy Officer at Bloomreach, a CommX member. ?In this new era of commerce, a widespread adoption of an omnichannel strategy will be essential for building customer loyalty that lasts especially in the upcoming competitive holiday season.?

?From Digital Sales Cheer To Consumer Spending Fear?, the CommerceNext and CommX 2022 holiday report can be found here. To learn more about joining the CommX community, visit here.

Methodology

The survey was fielded online August 2?16, 2022, among 100 retail and brand executives from various-sized companies across a variety of categories.

About CommerceNext

CommerceNext is a community, event series and conference for marketers at retail and direct-to-consumer brands. In addition to the annual CommerceNext Ecommerce Growth Show and the esteemed CommerceNexty Awards program, CommerceNext also produces and hosts podcasts, webinars, industry research, an executive dinner series and an online community. Inc. Magazine named CommerceNext to the Inc. 5000 list of fastest-growing private companies in 2022 and also included the CommerceNext Ecommerce Growth Show in their list of the Top 5 e-commerce conferences for 2019/2020. To learn more about CommerceNext, visit https://commercenext.com.

About CommX

The Commerce Experience Collective (CommX) is a collection of technology providers and commerce professionals dedicated to creating a digital commerce future that connects brands and customers in meaningful ways. CommX members include: Avalara, the leader in tax automation software; Bloomreach, the world?s #1 Commerce Experience Cloud; Mirakl, the leading provider of marketplace solutions; ShipBob, the leading global omni fulfillment platform; and Sinch, a global leader in cloud communications for mobile customer engagement. CommX is fueled by exclusive research and insights from CommerceNext. For more information, visit: commerceexperience.com.

Source: CommerceNext

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