Liane Dietrich, MD at LinkShare UK, discusses how the economic challenges of 2010 have affected the landscape for retailers
Edited by Jennifer Denby
2009 has been another tough year for high street retailers and with several outlets such as Borders and Threshers being forced to close, it is now more important than ever that brands have in place an online strategy to compliment their offline offering. In addition, as consumers have increasingly turned to the web in search of the best deals, the key for retailers looking to boost dwindling high street sales is to seize the opportunities which exist online by promoting their brand whilst also appealing to the ever savvy online shopper.
To be successful in an economy which still remains fragile, companies need to adapt to the changing shopping habits of their target audience as well as maximise the potential of all revenue streams available to them. In the last twelve months sites offering discounts and promotions have become especially popular, this is even true of shoppers with larger budgets who are now also regularly looking to make savings wherever possible. One consequence of the bargain hungry consumer is that they have become more demanding – shoppers now require more from their online shopping experience and expect to be presented with something extra to entice them into making a purchase. With this in mind, brands have begun to take stock and offer shoppers something extra online. As a result, sites offering the promise of money off or other savings have continued to generate an ever escalating number of visitors.
One of most influential and effective strategies for online success is affiliate marketing and in the last year brands across a range of sectors have been investing in this method to improve their sales and presence online. Through affiliate, marketing companies are able to reach a larger number of consumers and the most innovative affiliate networks are extending the range of ways they target consumers. Voucher codes, banner ads and email marketing have all proved popular and will continue to impact the way shoppers buy from brands on the web. This is shown not only by the success of affiliate marketing to help initiate consumer purchases (affiliate marketing today accounts for as much as 10 percent of online sales), but also the sheer number of companies across a range of industries that are continuing to sign up with affiliate networks.
Although shoppers are often reported to have been hit hard by the recession, brands and their budgets have of course taken a knock too. Retailers need to ensure they get more from their money than in the past and this often means taking a more creative and streamlined approach to receive the best possible return on investment. Over the next year we expect to see online retailers align themselves more closely with a broader mix of marketing channels. To build and develop relationships with shoppers online brands require a consistent message which applies throughout the range of channels they use. Innovative brands are beginning to recognise this and incorporate a simple yet effective marketing approach across all of their online campaigns.
Over the last 12 months, the popularity of blogs has also grown and become an effective media channel. Many of the most influential blogs are written by people from outside of the traditional corporate arena and whilst their authors often started as commentators, in several cases bloggers are now regarded as experts within their field. For bloggers, the rise of online shopping and the use of affiliate marketing provides them with the opportunity to monetise their sites through third party endorsements. And with new tools and technologies such as Skimlinks now easily available, it is likely this trend will continue to flourish throughout 2010. Other emerging tools like LinkShare’s Easylinks are also helping to open up additional revenue streams for bloggers by offering site owners the ability to promote brands and relevant products on their site. As a result, ‘start-up’ publishers are able to develop a strong relationship with their audience by offering them something more than just blog posts, and for marketers, this is a new profitable channel.
Vouchers and cash back will also continue to prosper in 2010 and since the IAB guidelines were introduced, consumers using vouchers can be confident the discounts and offers they subscribe to are more reliable than ever. Shoppers familiar with the extra value and protection offered by the new improved vouchers and discount sites will not be willing to return to the higher prices they have paid in the past; instead they will continue to expect more from their shopping experience on the web.
So, what is the outlook retailers on and offline next year? Although the marketplace is likely to remain challenging, we expect to see companies investing in and selling through an increased range of channels. For all brands, integration is key. Audiences might be more demanding, but they are also more receptive to products and services they may have overlooked in the past. Retailers need to seize the opportunity to reach out to shoppers in different sectors across the whole of the web and with a raft of new technologies available, they can now see the fruits of their investment faster and with greater transparency. In conclusion, the uncertain economic climate has not only increased the number of companies investing in affiliate marketing, but has also created the perfect spring board for retailers to develop more targeted and tailored campaigns. Brands who have been struggling on the high street now have the prospect of enhancing their performance online; by simply reaching out to an ever increasing number of internet shoppers across a broader number of channels they can in turn boost their online presence and profitability.