ReOpening and Ad Spend; What It Means For Retail and Ecommerce.

From Members Michael McIntosh II, Director, PwC and John Rolston, Director, PwC

As our economy begins to reemerge, and some stores and businesses start to reopen with limited capacity, what are some tips for driving demand with controlled capacity?

While in-store capacity may be restricted, consumers have already signaled their preference: They want the optimal combination of online and in-store shopping. In the wake of the pandemic, curbside pickup has increased 200%, and online sales are up almost 50%.

This accelerated adoption offers an opportunity for companies to provide flexible, omnichannel options in an environment in which physical capacity is restricted. They can build customer profiles with a combination of  their own and third-party data to identify demand drivers, then drive demand using personalized targeting via tools such as search, addressable display advertising and social media. In addition, companies can bolster their digital operations and smooth out the kinks, so customers have a frictionless experience when ordering online for in-store or curbside pickup.

To keep customers coming back in this limited-capacity environment, companies can integrate technology and automation to enable customer and employee safety, while implementing advance-reservation entry with delineated time slots for shopping and dining.  Restaurants can also streamline menu offerings, add dividers between tables, offer contactless payment and deploy digital ordering technology via kiosks or tablets.

What are the practical considerations that businesses in different sectors (travel, retail, restaurants, entertainment) need to consider as they start to reopen their doors, including physical modifications to locations and new policies?

Businesses should earn the trust of employees and customers. Protective policies and equipment such as masks, plexiglass, open windows and routine cleaning — whether by continually disinfecting or using automated solutions — will now be considered table stakes.

Instituting special store hours for at-risk customers, flexible return policies and reservation-based time slots can provide further reassurance. Other measures include offering contactless interactions for high-touch interactions — from online ordering with curbside or in-store pickup to payments and delivery. Companies can manage the risk of employee exposure with temperature checks and contact tracing.

In addition, they can communicate clearly to customers how they have adopted safety precautions to help minimize risk to both shoppers and employees. Companies should also let customers know that they are holding themselves accountable for their actions regarding safety measures.

How will brands modify their messaging post-COVID? Will it change at all?

Safety is the new key to loyalty — a  vital component of  customers’ purchase-evaluation criteria. Brands must earn customer trust by committing to the health and safety of both customers and employees — and by expressing that deep commitment via their own communication channels as well as the third-party channels they deploy.

Consumers have clearly identified their preference for a combination of digital and physical options, so brands should communicate the variety of options available for customers to mix and match, enabling them to choose as much or as little in-person contact as they prefer. Companies can also use social listening to tailor their messages based on what customers are seeking.

How do you think the reopening of stores and businesses will likely impact ad spend in Q3 and Q4?

Brands will likely increase their Q3 and Q4 spend over current levels, a natural progression as customers open their wallets for the holidays. However, spending will likely understandably lag prior years. Prudent brands will likely stretch their budgets by employing digital channels to target customers more accurately with less spend, greater flexibility and a less opaque ROI. Companies should shift spend strategically to help drive greater efficiency and position your brand to more effectively gain market share.

What do brands that have paused their spend need to consider before restarting?

Brands that paused their spend should develop a clear strategy with accompanying success criteria. They should answer these questions prior to ramping up:

  1. Who are your most valuable customers and what are the best ways to reach them?

The ability to measure commercial ROI — as opposed to siloed measurement of promotional spend — will likely enable the most effective allocation across the brand-channel mix.

  1. How are your competitors advertising to customers?

If your competitors have been reticent to spend, this may be your opportunity to appeal to their customer base. Brands that are thoughtful and proactive during this period of uncertainty will uncover opportunities to expand their presence.

  1. How will you be responsive to customers?

Brands should be operationally agile across various functions. Iterative testing will likely help identify customer preferences. Clear evaluation criteria focused on conversion metrics should guide your approach.

  1. How can you ensure that you optimize your ad spend?

A recent PwC study, conducted in conjunction with ISBA and 15 major UK advertisers, revealed that 74% of media spend does not elicit the desired result. To ensure you get the return you seek, assess your media spend by channels, brand placement and targeted customers.