Nonessential Retail, Essential Digital

Online sales in the United States have surged in recent months. As such, today’s acceleration of e-commerce amplifies the need for retailers to connect with consumers earlier in the shopping journey, fueling customer acquisition and fostering brand loyalty. This is especially important as we enter what consumers might consider the most meaningful holiday season of their lives.

U.S. retail sales rebounded sharply in May as thousands of stores reopened after lockdowns were lifted, representing the largest monthly surge on record (+17.7 percent). Unfortunately, this follows two months of record declines, and overall sales were still down 8 percent from February. Some categories, like apparel, were down as much as 63 percent from a year earlier. The consistent bright spot continues to be that consumers are spending more time and money in digital channels (+15 percent YoY in Q1).

Online shopping is taking on a new consumer challenge, one that ideally exemplifies the advantages of real-life in-store browsing while maintaining the convenience of traditional e-commerce. As we enter the second half of 2020, our data indicates that consumers are searching and planning for the holidays earlier than ever. Still, shoppers are concerned they'll miss out on the in-person experience to pick out gifts for their loved ones. With this in mind, brands must continue working through and determining how best to inspire shoppers to buy their products by creating highly visual digital shopping experiences — especially in nonessential retail, where physical stores are slowly reopening.

Here are the top tips retailers should consider for the weeks, months and major milestones ahead:

Higher-Funnel Marketing Investments

Unlike traditional bottom-of-the-funnel-focused e-commerce efforts, retailers today need to make more marketing investments higher up the funnel to fuel customer acquisition and create advantages in the form of returning customers. With more people making purchases online, the importance of connecting with consumers earlier in the shopping journey is more important than ever. A home furnishing retailer created a visually compelling "work from home campaign," featuring products it sells within a lifestyle image — a much more compelling experience than white background product layout shots. Inspirational, experiential online shopping is more important than ever.

The acceleration of e-commerce is here to stay beyond temporary physical store closures, and brands need to capitalize on this trend by inspiring consumers towards high-value actions.

Full-Funnel Consumer Influence

Retailers need to influence consumers before they make their purchase decisions. This is as critical as being there when they're ready to convert. Full-funnel digital experiences can offer both. Prospect activities to in-market consumers by offering a visually relevant message. Then continue to engage them with different types of ad formats that pivot people from inspiration to action. And lastly, re-target consumers that have engaged with your content.

This full-funnel strategy is unique to Pinterest, with high-value shoppers providing explicit product interests through searches. This activity provides a goldmine of data to help merchants market their products across the full consumer journey. Between March 2020 and May 2020, we saw a 3x increase in "Christmas gift ideas," indicating that consumers are eager to begin planning and buying for the major holidays ahead. In turn, brands have the opportunity to help consumers navigate the shifting holiday climate while still making their celebrations feel special.

Inspiring Through New Consumer Mind-Sets

Consumers are seeking inspiration now more than ever, especially as they’re searching for products online and returning to stores in person. Visual search, paired with innovative commerce capabilities, will be key in connecting consumers and brands in all the moments across the path to purchase — from inspiration to transaction. This full-funnel, early-touch approach will become even more important leading into the holiday season, as consumer behaviors within physical stores are re-evaluated. We may never completely go "back to normal." Retailers must consider new and innovative ways to engage with consumers.

As our recent report details, Earlier Than Ever, consumers are “looking forward to looking forward” to the holiday season ahead. 2020 has been a difficult year, and through our search data, we’re seeing consumers are craving the comfort of the holidays and even smaller “micro-moments,” like Friendsgiving ahead. This means that as consumers shift their use of the physical store experience to more deliberate actions like curbside pickup, there will be an even bigger need for retailers to create digital experiences that mimic in-store shopping with browsable and discoverable products and services. Visual search tools will also help brands harness the power of virtual, visual discovery to bring products and shopping experiences into people’s homes through the use of their phone cameras.

Consumers want to reinvent the joy and pleasure of shopping, where they can dream about different possibilities for their life, without adding unnecessary health and safety risks. This is a trend that reflects the continued shift towards consumers expecting highly visual and personalized mobile window shopping options. How will your brand and products show up for them?

Bill Watkins is head of global mid-market and small business sales at Pinterest, the visual discovery engine bringing everyone the inspiration to create a life they love.