It’s no secret that the economy has put tremendous pressure on retailers trading efforts this year. However, the popularity of Black Friday and Cyber Monday have provided a much-needed financial buffer.
In 2018, South African consumers spent a total of approximately R2.9 billion on Black Friday, and this amount is expected to rise each year. The massive cash windfall should serve as the catalyst for retailers to define their marketing strategies as soon as possible for 2020.
Top marketing channels in which to invest in 2020
- Social Media
Results of objective studies conducted in 2019 determined that social media is the most effective channel through which to reach holiday shoppers. Retailers commented that the majority of their marketing spend was dedicated to executing targeted campaigns on social media because of the platforms’ popularity and consequently ability to generate quality leads which drove sales.
In the USA, retail companies allocated a whopping 25% of their annual budget to social media holiday marketing campaigns. It was also found that social media marketing delivered the most return on investment (ROI) for recent marketing campaigns.
Therefore, South African retailers should start forecasting their marketing budget for 2020 and dedicate a generous percentage to social media marketing.
- Email marketing
In a previous article, we highlighted that email marketing is still relevant. In fact, results of surveys concluded that it was the second-most active marketing channel and also delivered an impressive ROI. One of the primary drivers is the channel’s ability to connect with prospective and existing customers on a personal level, which, in turn, drives higher audience engagement.
Email marketing’s cost-effectiveness combined with strong engagement capabilities make it an advantageous marketing channel for businesses with a limited marketing budget. For start-ups, email marketing gives the business an initial opening for targeted customer segmentation which can continually be refined.
However, there’s a crucial element that South African retailers need to take into consideration when analysing and allocating marketing budgets – the majority of consumers pay with cash.
An article published in the Business Report towards the end of November 2019, ‘With about R135 billion circulating through the economy at any given time, South Africa remains a cash-centric consumer society.’ According to the PYMNTS Global Cash Index™ South Africa Analysis, more than 50 percent of consumer transactions are completed with notes and coins. About 11 million people are unbanked and need to access the SA economy one way or another.
This means that retailers have another obstacle to overcome – how do they use the two most popular marketing channels to execute strategies that engage with consumers without alienating the over 50% who use cash to make purchases?
Do you want to know the answer, make more sales and achieve a higher return on investment? Please speak to us today.