Affiliate Marketing: The New Love Child of the Post-COVID Brand
Good ‘ole 2020 proved to be anything but business as usual across most industries, but few were as profoundly impacted as brick-and-mortar retailers. And let’s face it: thanks to the decade-long migration of consumers from shopping malls to the digital marketplace, many were already kind of vulnerable. The mandatory shutdowns and social distancing that came with the COVID-19 global pandemic certainly didn’t help matters and for some, were the proverbial final nail in the coffin.
Retail giants like Victoria’s Secret, Gap, and H&M all announced the closure of more than 200 stores apiece. Others, like Microsoft, decided to permanently shutter their retail locations altogether in favor of becoming solely an online retailer. This is a smart move considering a new report from UBS is projecting the closure of approximately 80,000 retail stores by 2026 if e-commerce sales keep trending upward. Spoiler alert: You can pretty much count on that.
How Quickly Is E-Commerce Growing?
Simply put, e-commerce is on fire right now. In fact, COVID-19 accelerated e-commerce growth by levels that industry experts predict would have taken six years to hit pre-pandemic. In May 2020 online spending totaled $82.5 billion, a 77% year-over-year increase–and it’s not slowing down any time soon. By the end of this year, e-commerce is likely to account for 17% of all retail sales.
Needless to say, having an e-commerce strategy is crucial right now.
How Can Marketers Maximize the E-Commerce Landscape?
With more consumers than ever turning online for many of the things they traditionally purchased in person, online retailers can expect better returns on their online ad spend, right? Well, not exactly.
To say the marketplace has been disrupted is an epic understatement. There have been extreme shifts in buying trends. Consumer spending is down overall, and ad revenue for some industries has taken a nosedive. To survive, every marketer out there has been forced to rethink strategy and retool campaigns–and then pivot some more.
But, believe it or not, there is some good news. Customers are still engaging, which means the best marketing strategy now–and post-pandemic–is to double down on channels that reach your target customer in new and exciting ways..
So, Where is the Best Return on Ad Spend Right Now?
With customer engagement at a premium, many brands are turning to affiliate marketing. Not only is affiliate a viable and high-ROI driving channel but the pay-for-performance model is also lower risk, more cost effective–and more nimble–than a flat-fee ad spend.
Not to mention, it’s a great way to connect with your ideal customers and nurture an ongoing conversation, which as we all know, is worth its weight in gold.
But I’m Not a Retailer. Is Affiliate Right for Me?
Absolutely! Since the start of the pandemic, internet usage is up nearly 70%. As the New York Times recently put it, “Coronavirus has changed the way we internet.” And that means one thing: The key to survival right now is the digital marketplace–no matter what kind of business you’re in.
For example, after the financial turbulence of last year, consumers are hungrier than ever for advice from trusted industry authorities and peers, which means there’s never been a better time for financial companies to tap into the word-of-mouth powerhouse that is affiliate marketing. Even industries, like travel, that were forced to standstill during the pandemic, are finding great value in the channel. Ongoing engagement with their customers–even when the entire world was on lockdown–is now converting to bookings as travel has started to open up again.
And remember, you only pay affiliates after they successfully generate a lead or close a sale, which makes the channel extremely budget friendly, with little to no risk. Even better, a well-crafted program can boost revenue by an astounding 30%.
But make no mistake, affiliate marketing is pretty complex, with a lot of moving parts. Having a successful program is by no means a sure thing, especially if you don’t have a solid understanding of the basics going in.
Check out our four-part Affiliate Marketing 101 e-book, which covers everything you need to know to launch and maintain an affiliate program of your own.