How Marketers Can Achieve E-Commerce Growth Amid Economic Uncertainty

The holiday season often brings excitement for the e-commerce industry amid festive campaigns and acquisition of new customers. In reality, there are a number of outside factors that can impact consumer spending. U.S. companies are sensing that many consumers may be treading cautiously due to a number of factors. In fact, a recent study suggests that while 45 percent of consumers plan to spend the same as last year, 27 percent are planning to spend less.

What can marketers do to drive growth in times of economic uncertainty? Let’s dive into how e-commerce brands can use the data they have to build effective marketing strategies.

It Starts With the Data

First-party data remains the best source of information readily available to marketers. Why? It's accurate, reliable, and comes straight from the source. This data typically includes anything submitted during the ordering process (e.g., name, email address, physical mailing address). In addition to personal contact information, it also includes customer purchase history and preferences.

Brands can take it a step further by enriching their data. This process combines the contact info and purchase metrics you’ve already collected with additional context and insights from external sources. This might include demographic, psychographic and behavioral information. Enriched data gives marketers a fuller view of their customers, allowing them to build a more personalized experience.

Tailoring Marketing Strategies Using First-Party Data

When faced with times of economic uncertainty, it's especially important to remember that our goal as marketers is to speak to individuals. Casting a wide net and hoping you catch something isn’t the right approach. Instead, tailor your marketing strategies by focusing on people-based metrics to achieve the greatest impact. Here are a few tips:

1. Create customer personas.

Identifying customer personas is crucial for optimizing marketing strategies. Understanding the distinct purchasing patterns and product preferences of your primary customer groups allows for more targeted marketing efforts. Additionally, integrating supplemental demographic or behavioral traits of your top customers makes it easier to align these audiences with ad platforms, facilitating highly personalized campaigns. This strategic alignment helps avoid the inefficiencies of relying solely on learning algorithms to identify the right audiences, ultimately speeding up the process and maximizing budget effectiveness.

2. Focus on your highest value customers.

There's a key difference between looking at the data and looking at the right data. Marketers often look to their highest volume customers when building campaigns. However, when faced with how to maximize your ad spend for the highest return, we want to look at highest value customers instead. Identifying customers with the highest lifetime value not only brings in sales now, but also helps ensure long-term profitable growth for the brand.

3. Target discounts wisely.

Discounts and promotions can be a powerful tool when utilized properly. Knowing that many consumers may be looking to keep a tighter hold on their wallets this holiday season, brands can utilize enriched first-party data to identify how and when to implement key seasonal campaigns. And since many consumers are still planning to spend the same as they did last year, marketers can better target these promotions to avoid unnecessary discounts.

4. Determine free shipping thresholds.

Free shipping can be a powerful incentive that encourages consumers to complete their purchases. However, not all marketers are looking at the data to determine the right cart size to maximize margins. For example, instead of setting a $50 minimum for free shipping, consider whether you could achieve similar buying patterns with a $100 threshold. By leveraging buying behavior data, you can refine your marketing strategies to achieve maximum margins.

Personalization is Key

As e-commerce brands navigate the challenges of economic uncertainty this holiday season, personalization and well-timed execution becomes all the more important to drive successful marketing strategies. Through the power of first-party data, marketers can better tailor their messaging and promotions to boost customer engagement and make the most of ad spend this holiday season.

Cary Lawrence is the CEO of Decile, a customer data and analytics platform whose mission is to help e-commerce brands grow profitably.