5 Reasons Fashion Brands should be Doubling Down on Affiliate Marketing in 2021
When Covid-19 started, The Business of Fashion put out a startling headline saying, "For Influencers, Affiliate Revenue Is Next to Disappear," which made the argument that major retailers were taking advantage of the pandemic by lowering or zeroing out affiliate commissions. This would create a domino effect that would leave influencers and publishers that rely on affiliate income out in the cold.
The first part of this story was correct. In fact, many large retailers including Amazon and Walmart made the decision to dramatically lower their paid channel costs during Covid-19, and some of those cuts have since been reversed, while others have not.
But here is what we are actually seeing as insiders:
Fashion labels, fast and slow fashion manufacturers, and niche retailers that have actually stepped into this vacuum have been rewarded quite handsomely.
Here are 5 reasons to double down on affiliate marketing spend if you aren't already convinced:
Exploit the vacuum
When mega retailers pull out, that equals opportunity for you. Retailers that pulled back during Covid-19 like Amazon, Walmart, Macys and so many others occupied a large percentage of affiliate revenue for many influencers and publishers. Rather than view this as a doomsday scenario, smart brands stepped in to get heavily discounted paid placements, lower CPAs and better levels of exposure, at financial entry points that were previously unheard of. And in some cases, they actually got these influencers and publishers to do something that they wouldn't have done in prior years, which is even just to respond to their inquiry!
This paid channel works, with high ROI
The entry of cheaper overseas manufacturing along with higher marketing costs means tighter margins for clothing manufacturers. Affiliate is traditionally a paid channel that delivers sales under the all-important CPA model, meaning you pay only on completed sales. In our experience, fashion brands see even higher positive ROI than the average 7X that our clients enjoy.
When you factor in that new customer acquisition via the affiliate channel yields a more robust shopper profile - with a 21% higher Average Order Value (AOV) and a 58% higher Lifetime Value (LTV) - than shoppers from other channels, it’s a no-brainer.
Affiliate was practically made for Fashion
Lets face it, the ecommerce universe presents plenty of options for buying clothing, shoes and accessories. Fashion brands need to exploit every opportunity to stand out in a crowded marketplace. The beauty of affiliate is in the ability to be an educational vehicle to help motivated shoppers understand how you stand out.
Maybe you have a brand that also donates to charity. Maybe you are a 100-year-old family brand. Maybe you use sustainable materials. Whatever your key differentiators, a thoughtfully linked blog post, influencer recommendation, or product review is the best vehicle to uncover buyers with intent.
The beauty of digital marketing is how accountable it is, and affiliate is no different. You see the entire lifecycle of a click with robust reporting options that allow you to digest customer and shopper behavior like never before. And the best part: automated reports and custom dashboards now rule the day. Digesting customer intent data has never been easier or more actionable.
Test and Invest
Unlike traditional advertising, where you plunk down a pile of cash and hope it reaches your audience, you are working with a motivated base of affiliates in this channel, many who are happy to test campaigns, get your products to review, and help align your outreach efforts with their readership. And non-traditional partnerships are more common than ever, such as email co-marketing, physical leaflets in subscription boxes, turning your customers/resellers into affiliates, and many more exciting marketing initiatives.
To share more intel we've collected on fashion brands, let's schedule a no-pressure call. Even just to nerd out on the topic of affiliate marketing.