Five Strategies for Success in 2021
04/12/2020 | Article
written by Gustavo Bacchin, Co-Founder & COO, Cadastra
It is often said that necessity is the mother of invention. When a new development emerges and changes the context of our lives, human ingenuity rises to meet the challenge.
When automobiles became attainable and commonplace, necessity invented traffic lights. When steel became easy to produce and skyscrapers could be constructed, necessity invented the elevator. And so when 2020 brought us a global pandemic – it was no surprise to see invention and innovation flourish once more.
The impact of COVID-19 saw brands, retailers and businesses of all shapes and sizes accelerate their digital capabilities rapidly – with many progressing what would have been a five year journey in the space of a few months.
But now this rapid leap forward has occurred, what will cut through in 2021? Here we take a look at the five trends we expect to dominate 2021 – and how businesses can take advantage of them.
Higher and more sophisticated consumer expectations
Consumers are forcing businesses to innovate. As physical stores closed, it pushed shoppers to digital channels. Google search data shows that since the beginning of March, search interest in online shopping and how to buy online has grown by 2X worldwide.
This experience has matured us as digital consumers. Shoppers now expect brands to be able to provide what they are looking for online instantly – and provide a seamless experience too.
Increasingly we are seeing consumers turn to digital channels for services and products that would typically be reserved for physical experiences – Google Trends shows sizeable increases in searches for ‘virtual try on’, ‘online classes’, ‘virtual pub quiz’, ‘customer service live chat’ and ‘virtual gym’. These are new experiences for both buyers and sellers – so as we move into 2021 there is a significant opportunity for brands to own and define these digital experiences.
These new consumer habits are here to stay, and so businesses need to ensure they are taking advantage of all the features modern advertising platforms have to offer. Consumers are expecting to find what they are looking for instantly – and so advertising strategy needs to be highly tailored and relevant.
This is where the ROI lies for brands. It is not enough to just do the broad strokes and cover basic SEO, PPC, Social Media or Email Marketing – you need to extract the best of what each channel and format has to offer, intelligently leverage data and deliver personalised messages that reach consumers in the right place, at the right time, with the right offer. Consumers expect no less.
Look beyond Digital Transformation
Digital transformation can take many forms. Just as COVID accelerated the transformation process for businesses – it also accelerated the transformation for consumers. Shoppers who may have only ever purchased through physical stores were forced to get the necessary tech – or develop the user skills – to enter the world of ecommerce.
But it’s important to remember digital transformation isn’t about technology – it’s about convenience. In 2021 it’s critical to find creative ways to provide convenience. Can you offer a subscription model? Can you offer free trials to allow customers to test your products? Can you offer a delivery service with more slots and options? Businesses need to constantly ask: how can I change my proposition to improve the experience?
The key to improving the customer experience lies in the data. At Cadastra we help our clients gather data from a comprehensive array of sources and different interaction points along a customer’s journey. From this data you can build intelligent audience segments – and craft a personalised experience for users depending on their individual needs.
Proliferation of channels, more is more?
A trend that will certainly continue as time marches on is the proliferation of channels.
Digital is fragmenting the media landscape constantly – and in 2020 we saw another powerhouse channel emerge in TikTok. The short form video app now has over 800 million users, and so it is no surprise that advertisers are scrambling to find ways to leverage the platform.
There are certainly exciting new opportunities for brands here. TikTok recently partnered with Shopify to enable social commerce – whilst in China there is a huge surge towards live commerce on similar platforms, where influential users operate ‘QVC style’ live streams.
According to iResearch, by the time the quarantine restrictions began loosening and offline retail started reopening at the end of March, the number of Chinese consumers watching e-commerce live streams had reached 265 million, or 29.3% of the country’s total internet users. In one day alone, Alibaba’s two top-performing live streaming influencers, Austin Li and Viya, generated over $149.4 million in non-refundable pre-sales deposits.
Clearly, there is a significant opportunity to engage audiences through these new channels as they emerge. However, you shouldn’t just jump on the bandwagon because it is shiny and new; it has to be where your customers are. Do not dismiss your current customers chasing new customers on new channels – if your customers are still on, let’s say, Facebook, then you must be too.
A Multichannel strategy that drives growth
Multichannel is not about reaching a customer across as many channels as possible. It’s about understanding where your consumer is, and crafting an experience based on who they are, what they are using, and what they want.
It comes back to intelligent data use. If a customer lands on your website and doesn’t purchase, but then returns on an app – you need to engage with them in a different way. You aren’t meeting them for the first time and the experience needs to reflect this.
Multichannel is not complex. It’s just a matter of connecting the dots and offering a tailored experience. The challenge is integrating the data – how can you effectively connect your data and use it to empower decision making?
A common opportunity we see with multichannel retail stems from the varying Customer Acquisition Costs (also known as CPA) and customer lifetime value (CLV). Cost and value will be different for physical channels, for Facebook or Amazon or Shopify, and vary from business to business. The challenge here is to find ways to migrate customers away from high acquisition cost channels, and move them to a combination of channels which provide a better margin and which provide an opportunity to cross-sell or up-sell to the multichannel consumer.
Buying local – where context is key
Local commerce is booming – and this will continue next year.
There are a number of factors driving this. Of course, we are all travelling less. But equally, there is a considerable desire from consumers to support local business – research from Google shows that in the UK 43% of consumers believed that local businesses are good for the economy, while 57% of people said that they were more likely to spend money at a business that offers locally produced products.
Another factor influencing this is how we use our smartphones. Consumers are looking for real-time information. “What store is closest? What is open? What has XX product near me? When is the quietest time to visit XX store?”. These habits pre-date COVID and are set to stick around. In 2019, Google data showed that mobile searches for “store open near me” increased by a colossal 250%.
It’s essential for local brands and businesses to utilise the different channels and ad formats that enable you to reach your customers locally, and position your business as the answer to the most relevant queries.
At Cadastra we help businesses use tools like Google LIA (Local Inventory Ads). Focused on mobile, LIA works as a Google-hosted page for your shop, called the local storefront. Customers can use the local shop front to view in-store inventory, see opening times, find directions – while empowering retailers to monitor and tailor the impact of digital ads on online and in-store sales.
2020 is a year that will live in infamy – but it is a year which has undoubtedly sparked a massive acceleration of digital transformation all around the globe. The trends we have seen emerge this year are set to continue on their upwards trajectory as we move into a new year – and it’s crucial businesses of all sizes understand how to tap into these as they grow.