Article by Jack Davies, Commercial Director at Webgains.
There is no escaping it. Following a bizarre few years for the UK, we’re now facing yet another life-changing event, in the form of the ‘cost-of-living’ crisis.
For the majority this represents a worrisome time – H1 2022 became a time for job cuts and spending reductions at firms previously flying high.
In H1 2022…
- Online sales in the UK fell 4.3% (seasonally adjusted) [ONS]
- Proportionally, online sales of total retail is at 26.3% compared to a peak of 37.5% in February.
To show the extent of market decline, In April 2022, KPMG surveyed 3,000 consumers, aiming to gauge their spending habits for 2022. Whilst not potentially wholesale marketing strategy-based changes, the results were eye-opening on the current climate we face:
- 67% of consumers planned to cut back on buying clothing.
- 34% of consumers were investing in fewer beauty products or services.
- 39% of consumers were not booking holidays, nor searching for lower prices or delaying trips.
67% of consumers planned to cut back on buying clothing
In this period of turbulence, businesses of all kinds are focusing on ‘leanness’, whilst still actively identifying new avenues of increasing their revenue outside their current core marketing strategies.
As organisations adjust their current marketing mix and make the necessary cutbacks to their paid channels, it would also be advisable to review channels that offer much lower risk and drive excellent results.
As organisations adjust their current marketing mix…It would be advisable to review channels that offer much lower risk and drive excellent results
As customers begin to make more considered purchases, checking multiple sites and price points, affiliate marketing offers a powerful channel that provides access to relevant audiences on a pay-per-performance model.
As shopper pre-purchase scrutiny heightens, the importance of having a balanced and resilient affiliate program has become tantamount to success. Merchants partnered with a varied mix of publishers will be best placed to help the customer to check out and beyond.
Merchants partnered with a varied mix of publishers will be best placed to help the customer to check out and beyond
In the affiliate space, publishers offer multiple additional benefits to the consumer as they make purchases, whether that be cashback, discount led promotions, lowest price satisfaction via CSS, or even increased confidence via brand-led content.
Price elasticity becomes an ever-increasing challenge, resulting in the reliability of discount-centric codes within the affiliate channel being likely to increase. Brands may recognise the benefit of engaging with publishers, who in turn will provide access to ‘window shoppers’. This significant group are not brand loyalists but rather shoppers who make purchase decisions predominantly on price.
Price elasticity becomes an ever-increasing challenge, resulting in the reliability of discount-centric codes within the affiliate channel being likely to increase
Affiliate networks have always driven more new than return custom, and that has not changed. However, we may be witnessing a shift that sees this alter slightly as customers engage in repetitive ‘window shopping’ behaviours. Something to keep an eye on.
The above just scratches the surface on a multitude of “road bumps” that are beginning to bite brands more and more. It is of utmost importance – whether you already run an affiliate program or are looking into this as a new avenue – that you pick a network who fits your needs best. For some advertisers this might be purely a platform to let you expand your partnership network. For others, a network might stand out for its account management and customer service credentials.
It is of utmost importance – whether you already run an affiliate program or are looking into this as a new avenue – that you pick a network who fits your needs best
Webgains offers a wide range of service-levels to suit every need, providing best-in-house solutions alongside our proprietary tech platform to assist you in your affiliate journey.
Are you going be at PI LIVE London 2022? If you are, I’d love to catch up during the event. If not, please feel free to reach out any time for more information about Webgains or the affiliate channel. Get in touch – jdavies@webgains.com.
Article by Jack Davies, Commercial Director at Webgains.