With a potentially gloomy consumer retail outlook on the horizon this holiday period, it’s time for businesses to shake up their advertising. Snapchat ANZ’s Head of Retail, Ella Keddie, shares how using social media to reach the right customers is key to Q4 sales success.
I agree – Christmas is the most wonderful time of the year! It’s a time to pause, reflect on what matters most and make loved ones feel special. But for brands, the holiday period can be utter chaos, with frenzied advertising, order fulfilment, supply and postage, and customer service issues to deal with in an incredibly condensed space of time. And with Australians really feeling the financial pinch this year, this silly season is likely to be particularly difficult for both brands and consumers.
Turbulent times ahead for retail
Given today’s economic climate and the rising cost of living, consumers are on the hunt for discounts. In 2022, retail turnover in November rose by 1.7% as a direct result of Black Friday and Cyber Monday sales. December retail turnover then fell by 3.9% against 2021 figures1, though, demonstrating that shoppers are taking advantage of ‘deal day’ discounts for the gift-giving season and spending less in the final month of the year. 7NEWS Finance Reporter, Gemma Acton, believes Australians will be far more discerning with their spending this Christmas: “As more households cycle off fixed-rate mortgages and the full impact of rate hikes kicks in, the financial pinch will be felt more sharply and widely. Consumers will be looking to stretch their dollars however they can, including capitalising on discounts, promotions, rewards points and loyalty programs.”
Snapchat: the smart choice in a saturated market
So, with consumer sentiment at its gloomiest, what’s a brand to do? Well, the best way to make sales – regardless of the economic environment – is to put your products in front of the right customers. But who are those right customers? Well… despite economic pressures, Gen Z and Millennial consumers still have a staggering combined purchasing power of $5 trillion globally.2 And, now more than ever, younger shoppers are pouring their purchasing power into products they discover on social media. So it goes without saying that brands need to advertise in places where these potential shoppers can be found. In Australia alone, the social commerce industry is expected to grow by 14.4% annually, reaching an anticipated A$2.465 billion this year and a staggering $3.212 billion by 2028.3 So, it follows that capturing the attention of young, tech-savvy spenders is the key to making the most of retail sales opportunities for many brands this holiday season. And Snapchat is a convincing place to start.
Because those who use Snapchat – we call them Snapchatters – are 40% more likely than non-Snapchatters to discover a product on social media – and 176% more likely to purchase there. In fact, 98% of Snapchatters say they’d purchase directly from brands on social media, rather than an online marketplace, if offered.4
At Snapchat, we’ve spent the past few months improving our performance platform, which has already shown a dramatic uptick in sales for our partners. Snapchatters can now use their phone browser (for example, Safari or Chrome) when shopping rather than the Snap browser, which streamlines their checkout experience. We’ve also introduced the ability to optimise to a click-based conversion rather than a view-through conversion, which drives stronger intent and trains the algorithm to find customers more likely to convert on a last-click basis. And we’ve updated our ad format to incorporate a tappable card rather than a swipe, driving quality higher-intent traffic and reducing bounce rates.
Since the update, ecommerce trailblazer Hismile – globally renowned for its teeth whitening strips, colour-correcting serum and toothpaste products – achieved an 861% increase in their last-click conversion rate, 1003% increase in RPU, 2759% increase in last-click attributed ROAS and 14% higher AOV.5
Meanwhile, vegan skincare company Esmi Skin Minerals – who were looking to increase conversions, lower their CPA and improve their ROAS – used purchase lookalikes, broad targeting and the GBB Pixel Purchase to target its core segment: 18+ women. The brand saw a 722% increase in ROAS from Q1 2022 to Q1 2023, and an 83% drop in CPA over the same period.6 Steven Dsouza – founder of Esmi’s digital agency, Firebrand Digital – said the latest performance updates made Snapchat “one of the most competitive platforms in our agency’s marketing mix for retailers”.
In these tough economic times, it’s important to use the power of social media to deliver for your business – and here are five ways you can do just that…
Snapchat’s strategies for a successful Q4
1. Start early
52% of shoppers start searching for Christmas gifts in early November, and all signs point to this happening even earlier this year. By reaching out to your audience sooner, you’ll be top of mind when it comes time to find – and buy – the perfect present.
2. Take advantage of high-converting sales periods
Adjust your DR-to-Brand ratio to 80:20 during these three key conversion periods: Cyber weekend, the first week of December and the week before Christmas. Across other Q4 periods, have a 60:40 DR–Brand split.
3. Find Snapchatters where they can be found
Snapchat’s Stories video tab is a hugely popular place for Snapchatters, with 82% finding and sharing their inspiration here.7
4. Maximise your reach
Snapchat's recently released takeover products deliver a high reach opportunity, for brands to be the first impression a Snapchatter sees on any given day.
5. Get in touch
Work with our team to win the 18-34-year-old audience, our retail team is already working with many retailers to help them reach millions of Snapchatters this retail season. If you are reading this and would like to work with me and the team on your Snap retail strategy, then reach out on ekeddie@snapchat.com.
Sources:
1. Australian Bureau of Statistics, Retail Trade, Australia, December 2022. Available at https://www.abs.gov.au/media-centre/media-releases/retail-volumes-fall-02-cent-after-four-straight-rises
2. Snapchat, 2023 Global Alter Agents Research commissioned by Snap Inc.
3. Business Wire, Australia Social Commerce Market Report 2023. Available at https://www.businesswire.com/news/home/20230331005207/en/
4. Snapchat, 2022 Future of Commerce Study commissioned by Snap Inc and IPG MAGNA
5. Snapchat, Hismile Returns to Snapchat and Sees Last Click Performance Skyrocket Thanks to 7/0 Performance Update. Available at https://forbusiness.snapchat.com/inspiration/hismile
6. Snapchat, Esmi Performance Skyrockets Under Latest Performance Updates on Snap. Available at: https://forbusiness.snapchat.com/inspiration/esmi
7. Snapchat, 2022 Global Alter Agents Research commissioned by Snap Inc.
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