Ahh Christmas…the most wonderful profitable time of the year. Like in many other markets, Christmas-time in Australia is a big deal. Over the years, there has been a notable shift in the amount Australians have spent on gifting.
Last year recorded a 12.5% increase – almost $12 billion in dollar value! If this yearly trend continues, it’s expected that each Australian will spend over $1,000 each on gifts this year – a huge opportunity for marketers (any anyone with a big Christmas stocking).
But while spending is expected to increase year on year, the retail market in particular is very different to 2017:
i. Buy Now Pay Later payments, like Afterpay, accounted for 7.7% of total online goods spend in 2017 and is growing across the key 18-39 year old demographic. It’s expected that this share is already much higher in 2018.
ii. Everyone’s favourite ecommerce destination Amazon is slowly disrupting the Australian retail industry since its launch last year. Department stores are still competitive but electronics and consumer goods retailers are losing their market share and experience-selling websites are losing market share to gift cards.
iii. Chinese retailers continue to grow in Australia and influence the way many consumers research, buy and pay for goods. Australia is now the third largest overseas market for Alibaba and when looking at experiences, leads the way. Alibaba has 2,000 Australian brands on board with a further 10,000 accepting Alipay. With pop-up shops in Sydney and Melbourne, expect them to take further spend from traditional apparel and gift destinations.
iv. The average Australian is choosing to go debt-free. While 36% of Australian consumers are planning on paying for Christmas with credit cards, a surprisingly large number of them (75%) will look to use savings instead.
v. Sales events are shaping the retail year more than ever. While Boxing Day remained the largest sale day in 2017, Click Frenzy and Black Friday are far outgrowing it. Retail traffic continues to decline as online visits increase.
Some key dates to remember:
In addition to the above trends, a few key types of shoppers are shaping the way we market during Christmas.
Our strategy team decided to delve deeper into these Australian consumers and identified six distinct profiles. They’re an eclectic bunch, from the Super Mums who plan well ahead, to the Last-Minute Shopper, like myself, who leaves things to the eleventh hour and relies on quick deliveries online.
What is interesting is that each type of consumer requires a different level of targeting: a different device, platform or time, and a unique call to action within our messaging.
So how do you target each group differently and make sure you get the required result from them?
1. Identify your target profiles
Work with your team to break down the different types of consumers that shop at Christmas, identify if they are relevant for you, and decide how you could target them across the Christmas period.
2. Inspire shoppers
It’s commonly known that a lot of consumers are influenced by what they see online. Despite the amount of research they do, the time spent on each platform and when they seek inspiration varies significantly. For example, Bargain Hunters create shopping lists and then check for bargains; Promoted Pins on Pinterest are a great place to influence this list. Over Extenders generally purchase offline; showing them products are available via Local Inventory Ads on Facebook and Google may inspire them to act.
3. Focus on key shopping windows
As mentioned before, key shopping dates are growing YoY with Click Frenzy and Black Friday. While everyone loves a bargain, each consumer group reacts differently to each one. By treating users as individuals, we can deliver a more personalised experience and get them to act when needed.
4. Don’t forget about instore
It’s reported that less than 10% of total sales happen online, meaning that there is a huge opportunity for brick and mortar businesses to capitalise during the Christmas period. There are two main aspects to this: driving people instore, and understanding the impact.
Driving people instore
Many platforms allow us to target a geographic distance easily, however this can be time consuming to set up across multiple locations. Both Google and Facebook allow us to drive consumers instore while promoting relevant products, making them the ideal choice for these shoppers.
Understanding the impact
Store Visit conversions allow you to measure how a click on an ad affects footfall. Last year Google ran a study to show how Google Search and Shopping Ads can drive incremental store visits. To quickly get a deeper understanding of how an ad interaction impacts your shop visits:
i. Overlay a timelag report – Find out how long it took a user to visit a store after they clicked on an ad. You can even segment this by device to help drive your decisions across your device strategy.
ii. A distance report – Understand where a user was located and how far away they were when clicked an ad and then visited a store. This level of data could then help to dictate where you focus your budget to help drive more store visits in future.
5. Remember Amazon
Search is the first step towards purchase but when it comes to product search, Amazon is emerging as a new leader. A recent study in the US showed that when starting an online product search, most people visit Amazon first – before all top search engines and retail sites combined. While not yet fully launched in Australia, Amazon are recruiting for a local AMS lead and this means we need to be prepared for the launch in Q3/Q4. To start preparing for a possible Amazon launch in Q4, you should identify:
i. What (if any) SKUs will be available through Amazon.com.au
ii. What creative learnings can we leverage
iii. What keywords work well on search, and what targeting works well on social.
The Christmas period is busy for all of us. We all have to go through the same process as every other consumer, so we understand that it is complex and stressful. Speak to your iProspect team about some of the ideas above and you’ll have one less thing to worry about over this year’s Christmas period.
Amazon – Prime is set to shake up the market, being offered for $59 and have opened a second distribution center in Sydney