Retailers are facing a unique number of challenges as the 2022 holiday season approaches. Higher annual rate increases and expanded surcharges will likely raise shipping costs by 5.9% while consumer prices continue to rise, making it difficult to meet consumers’ needs for value while also meeting profit margin demands. At the same time, a nearly $100B growth of non-auto inventory between April 2021 and April 2022 is causing challenges for retailers needing to move product and meet sales numbers before the year ends. Combine this with high inflation in Canada, and this holiday season is positioned to be another unique period for retailers, brands and consumers.
Succeeding in Holiday 2022 is going to come down to getting personalized connections right with each consumer, at the right time, with the right offer - and at a massive scale. Making these connections is the essence of discovery commerce, where brands and products find people, not the other way around. Discovery commerce is at the heart of what Meta has focused on since its founding: using insights about consumers’ preferences to introduce them to brands and products they’ll love, even if they didn’t intend to make a purchase.
The good news is that shopping windows — in terms of the number of moments and surfaces used — are expanding, with consumers embracing shopping outside of mega sales days and increasingly adopting an “always shopping” mindset across more digital platforms. For example, during the 2021 Holiday season, 1 in 2 shoppers said they took advantage of early holiday sales or promotions before Thanksgiving. And 91% of holiday shoppers surveyed in 2021 said they are likely to try a new brand during the holiday season. This seems to be a growing trend this year as well, with some major retailers acting on this insight.
An earlier shopping start gives savvy retailers more time to make critical connections with consumers and to experiment with finding the right product for the right person. This is where discovery commerce can help. Again, by flipping the equation and allowing products to find people instead of the other way around, Meta can help retailers make those personalized ‘a-ha’ moments happen for individuals at scale.
To fully realize the power of discovery commerce, retailers this holiday season should keep in mind four must-dos:
1. Focus on driving omnichannel sales
While fluctuations in COVID-19 cases may impact shoppers’ decisions on whether to buy online or visit in person, statistics indicate that many are now comfortable visiting stores. It’s estimated that 85% of consumers will do more in-store shopping in 2022 than in 2021. That means it’s essential to craft an omnichannel marketing strategy that meets the customer wherever and however they want to shop and discover. You can drive discovery of your brand and products with Meta’s localized ads, which surface products that consumers will likely want to buy nearby, and catalogue-powered ads, where brands can partner with a retailer to surface personalized local product ideas. Both of these solutions provide channels for moving excess inventory as you suggest products that consumers may not have thought of buying when they walked out their doors.
In pre-holiday experimentation, it’s critical to add an omnichannel measurement lens to your advertising. This can be activated in privacy-safe ways with Meta through geographic test and control experiments leveraging the Open Source GeoLift tool kit or by connecting your in-store data through Offline Conversions API.
2. Experiment with new (and reimagined) formats
Reaching customers in fresh ways can help you stand out and give you a broader canvas for expressing your brand story. Short-form video formats like Reels, which saw a more than 30% increase in engagement time across Facebook and Instagram in Q2 2022, can be especially effective. You can also digitize, localize and completely reimagine the look and feel of older formats like flyers, lookbooks and catalogues. This can give customers a range of choices to discover products they may never have known existed, driving incremental value for your business.
Meta makes it easy to personalize flyers with our discovery engine technology. We’ve found that digital circulars drive omnichannel sales for retailers who tried them across our platforms, driving an average 6.43x incremental return on ad spend (iROAS). For example, Canada’s largest sports clothing and equipment retailer Sport Check saw an 8.7% lift in omnichannel (in- store and online) sales using Meta’s digital circular solution. Luxury goods department store chain Hudson’s Bay, whose marketing team used geo-experimentation to measure lift in omnichannel sales, found that a digital circular brought in a 12.9x iROAS.
4. Embrace the new age of data privacy to connect with customers
Another major recent shift has been increased regulations around protecting consumer data privacy. There is a growing number of Meta products and privacy-enhancing technologies that aim to help brands respond to these changes, gleaning consumer insight while protecting their privacy. For example, Conversions API (CAPI) creates a direct connection between your marketing data and Meta systems that optimizes ad targeting, decreases cost per action and measures results across Meta technologies. Brands are using tools like CAPI right now to drive performance as the old ways of learning about customers’ wants and needs become obsolete.
As we enter another holiday season during a dynamic and uncertain time, you can gain confidence with a strategy anchored in sparking meaningful discoveries for customers. By focusing on driving omnichannel sales, experimenting with new (and reimagined) formats, delivering on consumers’ expectations around order fulfillment and embracing new privacy-first solutions, you’ll be able to leverage the expanded shopping time and surface products in today’s digital marketplace. For more on how to succeed this holiday, check out our Holiday Insights document “Controlling the Uncontrollables.”