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Q4 2020 Advertising Strategies for Retail Marketers

Mike Perekupka

Q4 2020 will be unlike any quarter the retail industry has experienced before. The COVID-19 pandemic is making retail marketers and major ad platforms rethink their traditional approach. Remote learning is impacting the back-to-school season while signs point to Amazon Prime Day taking place in October.

The year-end holidays will round out a busy and notable Q4 2020 advertising period. Below is the transcript from our webinar, How to Harness E-Commerce Momentum When Retail Seasons Converge. Led by Sidecar’s Mike Perekupka and Justin Smith, this webinar offers strategic guidance and advice on how retail marketers can plan efficiently for Q4 2020.

This transcript has been edited lightly for brevity and clarity.

Navigating the Holiday Gray Area

Retail marketers have focused on key moments throughout the year, but more specifically throughout Q3 and Q4. We all know that whether you’re an offline retailer or an online retailer or an omnichannel retailer, you rely on Q4, it drives the bulk of your annual revenue. It’s a really important time, and it is defined by key moments. And that all starts early with back to school.

The major theme of the rest of the year is that there’s a lot of gray area. We are blurring the lines between these key moments. More than 75% of retail sales we’re predicting during Q4, they’re not going to come during these key moments. They will come outside of the Black Fridays and Cyber Mondays of the quarter.

Advertising Gray Area Q4 2020

We’ve seen polls where more than 40% of Black Friday in-store shoppers say that they’re going to stay online this year. We’re in a period of heavy uncertainty; we’re in a period where we might not be in store or in school. Prime Day is moving. 

The idea of preparing for key moments has changed and shifted. You need to start preparing for what I’d call a trickle of demand throughout the rest of the year and a lot of uncertainty. So you need to be nimble. You need to be able to move fast. You need technology to arm you, to prepare and react to this uncertainty.

And you need a team surrounding you, whether it’s internally with your agency, with a technology provider, to set yourself up for success because things are changing so dynamically and everything is uncertain right now.

How Retailers Should Think About Prime Day 2020

Whether or not you sell products or advertise on Amazon, you’re impacted by Prime Day and the uplift in demand that happens during the two day period of time. When you are a consumer and you’re leveraging Prime Day to take advantage of promotions and sales in the middle of the summer, you’re looking for completely different products than you might be looking for in the fall, particularly if you’re a family looking for back to school items.

Advertising Gray Area - Amazon Prime Day 2020

Retailers will take a completely different approach this year with this advertising gray area. Reevaluating the product catalog is something we are prioritizing with customers. Dig in your catalog and look at product-level performance. It’s hard to compare year over year performance because the products you’re selling will likely be different than in years past.

We’ve always talked about Prime Day as a “dress rehearsal” for back to school. Now that it’s moved in 2020, it’s now a big dress rehearsal for Cyber Five and holiday. I would urge retailers to not only prepare for Prime Day in terms of inventory, but marketing and budgets and how advertising plays into your year-end approach.

The Impact of the New Back-to-School Season

Back to school won’t be the same this year. Retailers, put yourselves in your shoppers’ shoes and think about how they are going to be shopping. You need to challenge your norms and examine your data. Take the time to look trends, compare it, do research on other markets, and dive into your data to help with this very blurry season that is approaching.

Many of us across the country are forced to make decisions on how we school our children during the fall and early winter months of the year because of the advertising gray area. Some families are shifting to online schooling, some are going to do a mix of in school and online. Homeschooling has changed the way my wife and I have budgeted for back-to-school shopping.

Advertising Gray Area - Back-to-School Q4 2020

A lot of things we’re buying are add-on purchases. Retailers should be thinking about how they can increase cart size for back-to-school shopping. The way we’re purchasing is very different this year and we certainly aren’t alone. It goes back to evaluating data, looking at trends on a product level, a more granular level, to prepare for this ever changing environment and react to changes on a daily basis.

There is also the potential for another back-to-school season later in the year. Keep an eye on the dynamics in the market to prepare for two back-to-school seasons inside of one calendar year.

Planning for the Year-End Holidays

As we talk about year-end advice and how retailers should prepare for the traditional holiday season, the thing I’d have to call out first is very simply, start preparing early. Plan now and start the evaluation process. Think about all these things that may happen. Have plan A, plan B, plan C in place.

Due to the advertising gray area, retailers are coming in and reinventing new ways to do things like curbside delivery and shopping online for groceries. I think there is an opportunity for retailers to reinvent what it means to buy or give a gift.

Advertising Gray Area - Year-End Holiday Advice Q4 2020

I think there is going to be a subset of retailers that get creative and really take advantage of that. It’s a tough time, but there are areas of opportunity that exist because of this idea that everyone is finally willing to challenge the norms that have existed for so long.

With our customers, we are talking about how to prepare budgets and what to do from a promotional perspective. Be ready to be nimble, react quickly, and promote your products early so you can take advantage of an uptick in demand in September and October.

What Google Is Doing in This New Landscape

Google has rolled out a few updates that we have kept our eyes on. Smart Shopping campaigns have rolled out a new customer acquisition goal that you can set a new customer acquisition target. They’ve also introduced a new ad format for Smart Shopping, where it looks more like display ads. It’s trying to catch users at the right moment. 

I’d like to stress that with Smart Shopping campaigns, you have no control over managing budgets, and they’re not good at query filtering. So I would provide that level of caution that before you jump in, there are some flaws.

Free Shopping ads rolled out recently in response to COVID-19. There is a lot of interest in receiving free clicks. This is Google’s play to draw more attention back to Shopping ads. Google wants to increase competition back on Google Shopping.

Google is using this as a way to draw more advertisers back into the ecosystem to collect more structured data from their product feeds and more product data for them to build out something new that then captures more revenue from their advertisers.

Sidecar Product Updates

Sidecar is constantly iterating upon our technology. I’ll start with Google. What we’re doing is monitoring, using this idea of cross-channel audiences, observing people that interact with your ads on one network, and now they’re somewhere else. How can you bid differently and optimize for them? How can you be strategic about them? And that is one thing we are spending a good amount of time researching and iterating in our Google product.

For Amazon, as data gets more and more robust and the interface gets more and more lax, we’re finding that the Amazon interface is not up to par with Google. So we’ve introduced a feature called Nested Campaign Structure that we think is a huge feature that allows people to dynamically group their campaigns. We think it is a game changing feature. It had a lot of success with it on the Amazon front. 

And then one thing for Facebook I would call out is, again, as holiday season approaches, this is going to be more and more necessary is to dynamically allocate budgets and not let Facebook put your account into learning mode. You need to have control and allocate those budgets between top performing ads, campaigns, ad sets, and to do it with data science, automation, and the right team behind you.

I really enjoyed this conversation. Everyone out there, thank you so much for tuning in.