Marketing

6 retail insights marketers should apply this Valentine’s Day

With consumer spending for the Valentine's Day holiday expected to reach $21.8 billion, Daniel Heer, founder and CEO of Zeotap, maps out six points marketers need to focus on.

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February 11, 2021 by Daniel Heer

2020 redefined the shopping experience for consumers at every single level, forcing brands to rethink their retail and online channel approaches. With Valentine's Day approaching and consumer spending for the holiday expected to reach $21.8 billion (for context, shoppers spent $9 billion online on Black Friday last year — a new record), it's important for marketers to prepare as best they can.

With that in mind, here are six key insights for marketers to apply this Valentine's Day.

1. More people shopping online = more first-party data
By some estimates, the pandemic has accelerated the growth of e-commerce by anywhere between four to six years. Over 60% of consumers shopped online this past holiday season, a significant increase over the 20% who did so in 2019. The average cart size for these online shoppers also increased by about 30%.

This means that retailers now have access to more customer data than ever before, which they can use to get a better understanding of their audience's shopping habits and determine the most effective way of targeting consumers. With third-party cookies soon to be phased out, having ready access to first-party data will become even more important — retailers should use the Valentine's Day peak in sales to take stock of how they ingest, store and use this data.

2. More purchases on mobile apps
2020 was not just the year of e-commerce: it was also a time of explosive growth for mobile commerce (also known as m-commerce). Business Insider estimates that 45% of all US e-commerce in 2020 was in fact m-commerce, making up $284 billion of the market.

Many social media platforms, including Facebook, Instagram and Pinterest, have added shopping features to their apps that allow users to purchase items in a few simple steps. Retailers have also beefed up their apps to enable one-click checkout and further simplify the purchasing process. As new generations of digital-savvy consumers gain purchasing power, the share of m-commerce is likely to grow even more — so retailers should invest now to ensure that the mobile experience they offer is seamless and engaging.

With more people planning to shop on mobile for Valentine's Day this year, retailers should use their digital and social media channels to streamline the purchasing process.

3. Extending the campaign period
Last year's holiday season was unique for many reasons, not least because Black Friday and Cyber Monday campaigns lasted much longer than usual. This shift was prompted by multiple factors, including the need to reduce the number of people shopping in stores and ease the burden on already-strained delivery services.

The success of last year's Black Friday and Cyber Monday sales has shown retailers that a longer holiday season can work to their benefit by incentivizing individuals to spend more — something to keep in mind as Valentine's Day draws near.

4. Bargain hunting
It's no exaggeration to say that the coronavirus has had a profound effect on people's wallets. One reason that Black Friday sales were so robust was because they offered shoppers considerable discounts that could be applied over a longer period of time, giving people more time to allocate their budgets and comparison-shop.

Smart retailers looking to maximize sales should use their customer data to find the ideal time to reach out to would-be shoppers with discounts. As research by eMarketer shows, offering customers a discount is by far the best way for brands to motivate consumers into completing a transaction, with 87% of respondents reporting that a discount offer received after adding an item to their cart would compel them to make a purchase.

As economies worldwide work to recover their pre-coronavirus strength, expect consumers to seek out more bargains and wait for items to go on sale before making purchases. So for Valentine's Day, expect the "last minute" purchases to rise this year.

5. The need to redefine the brick-and-mortar retail experience
Thanks to the pandemic, the traditional in-person retail experience has been transformed. Instead of prioritizing customer service and encouraging customers to linger, stores now limit the amount of human contact and press customers to complete their shopping faster. For brands, one crucial challenge they now face is how they can create a positive consumer experience even as the amount of direct in-person contact is limited.

With that in mind, retailers must create more seamless, data-driven cross-channel shopping experiences so that they can continue to offer value to their customers. For Valentine's Day, for instance, retailers might consider offering incentives to shoppers who choose curbside pick-up instead of delivery or in-store shopping. This would both reduce risk and encourage people to engage more (and share more data) on digital platforms.

6. Increased customer disloyalty
According to McKinsey, 40% of consumers have tried out new brands or shops as a result of the pandemic — and many plan on continuing the relationship into 2021. For some brands, this is an unexpected opportunity to turn first-time shoppers into brand-loyal customers. For others, it's time to develop a new retention strategy that is rooted in personalization and in-depth customer insights.

To that end, in 2021, brands must find ways to maximize their first-party data, whether by analyzing it to uncover consumer insights or enriching it to gain a broader understanding of user behavior. This will allow them to make their advertising more effective while strengthening the relationship between customer and brand, thus encouraging brand loyalty. This Valentine's Day, brands should think long-term when the traffic peak arrives, already looking to strategies to retain and grow these first-time buyers.

Daniel Heer is founder and CEO of Zeotap

About Daniel Heer

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