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2022 Retail Marketing Strategy Planning: Top Considerations

By Matt Moorut | November 03, 2021 | 4 Comments

MarketingDigital Marketing Strategy and ExecutionMarketing Data and AnalyticsMarketing Leadership and ManagementMarketing Leadership and StrategyMarketing OperationsMarketing Organization and Talent

Recap: Retail Marketing Strategy In 2021

In 2021, retail marketing budgets were slashed to their lowest level in recent history. And yet, CMOs in the retail industry still targeted growth.

This may seem implausible, though it comes down to the fact that 2020 was such a bizarre year.

After revenues fell in 2020, year-on-year ‘growth’ largely relied on shoppers getting back to shops while continuing to leverage online shopping channels – both of which have happened. In the U.S., estimated quarterly retail sales were up by 28.2% in Q2 2021, year on year. Retail e-commerce sales also increased by 9.1%1.

That doesn’t mean it’s all plain sailing for marketing leaders tasked with improving digital performance. In the same period that e-commerce sales increased by 9.1%, our analysis has shown that traffic to retailers’ desktop sites actually fell by 3.6%2.

That wonky dynamic is not surprising given that retailers were forced to focus on efficiency given large budget cuts.

Analysis of  Gartner’s CMO Spend Survey shows that retailers cut budgets for every marketing channel vs. 2020 levels, with event marketing and digital advertising budgets falling furthest. With that the case, digital marketing leaders prioritised driving ROI from performance marketing campaigns, using PLAs and Facebook DPAs instead of worse traffic-drivers like display ads.

So overall traffic fell, but ‘high quality’ traffic remained and conversion rates improved.

Why Retail Marketing Strategies Must Change

Shifting spend to performance-driving ad formats makes complete sense with reduced budgets but it can’t continue forever.

We describe why in the research paper, Survey Analysis: Retail CMOs’ Focus on Digital Channels Will Increase Postpandemic Competition (clients only), though the title gives the gist. As more retailers focus on high-performing channels, the competition increases, the bid prices rise, and the ROI decreases.

Retailers need to find a different strategy. Performance marketing campaigns should feature, but so should new ways of engaging with consumers. Given potential future changes to cookie policies and ad targeting, building first-party data and retaining customers will also be critical.

The Challenge: Why 2022 Strategic Planning Is So Hard

The trouble retail marketers now have is planning resources for 2022 to maintain growth, without being able to rely on stable historic metrics to base an accurate forecast.

CMOs are looking back to 2019 levels to set expectations for 2022. That is not ideal given so much has changed in the digital landscape – and in consumer behaviours – since then.

  • Digital landscape: Emerging tools such as virtual appointments, AR size/fit guides and social commerce provide new ways to engage consumers online. In-store, retailers are increasingly leveraging QR codes, geofenced app prompts and digital displays to link online and offline experiences.
  • Consumer behaviour: We can predict shifting values and behaviours to a reasonable degree thanks to insights like Consumer Outlook: Retail in 2021 (clients only) but we can’t predict what further surprises the pandemic (or other disruptive events) may throw our way.

Recommendations For A Successful Marketing Strategy

Each retailer will have to find their own balance based on their own context. The thing that will define success is the flexibility built into those strategies, and the execution of them.

Retailers should ring-fence budget for exploring emerging technologies that can improve their customers’ experiences and remove barriers to purchase. At the same time, look for inefficiencies in internal processes to streamline delivery.

Where marketing campaigns aren’t tied directly to business goals, retailers should look for ways to analyse performance using any available metrics that can be linked to performance. For instance, can you test brand recall before and after ad campaigns run? Or can you analyse purchase levels among audiences that have/haven’t seen those ads?

It’s going to be a bumpy road in 2022. There are no guarantees that strategy set at the start of the year will be fit for purpose by the end. Still, by focusing relentlessly on optimisation of execution and nimbleness to changing dynamics, retailers can give themselves a fighting chance of success.

 

 

1 Source: U.S. Census Bureau, Advance Monthly Retail Trade Report

2 Source: Digital IQ Index: Monobrand Retail 2021

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Leave a Comment

4 Comments

  • Appverticals says:

    Good resource competition is plummeting and challenging retailers in retaining good employees.

  • In India, we have experienced growth in the digital marketing field. After the Pandemic, business people are focusing more on digital marketing of their business.

  • rushi says:

    informative blog explain basic of marketing with good example

  • This blog was too good and informative, I appreciate.