The Golden Quarter gets its name from being retailers’ busiest time of year, but while UK consumer peak spending intent is projected to hit £17.9bn, for brands, it won’t be an easy ride, according to new data from marketing platform Epsilon.
In June this year, the company commissioned Censuswide to run two parallel studies, one on a sample of 2,000 consumers, and the second, with 200 marketing decision-makers, to get an inside look into the spending decisions in the season ahead.
Ad spend is up, but shoppers are cautious
The report, Advertising Under Pressure, detailed that while ad spend is set to reach £50bn this year, growing seven times the pace of GDP, this isn’t matched by a growing audience. In fact, comparatively, internet users are up less than 1% year-on-year, with the amount of time the average user is spending online a day down 26 minutes from one year ago.
Indeed, while the report noted that there is £17.9bn of intent in play, the pool is “not a growing one,” and a near-£50bn ad market is going head-to-head for it.
At the same time, shoppers are being more cautious about how they spend their money. Indeed, 71% are reportedly cutting back on non-essentials, and 68% are looking for lower prices. There is, however, a caveat here: just under half still plan on treating themselves, which the report said emphasises that shoppers are editing rather than exiting.
Loyalty loosens
Simultaneously, despite shoppers pulling back from big spending, cost pressures are loosening loyalty across categories, with 60% open to testing out a new grocery brand. Meanwhile, in homeware this sits at 44% and for fashion, 43%. Loyalty hasn’t completely been thrown out the window, though. For those who maintain brand loyalty, good prices (47%), brand trust (42%) and loyalty rewards (35%).
Underpinning shoppers’ potential switch-up to challenger brands, however, is trust. Just under 60% trust brands more when they’re promoted by a retailer they already shop at. Alongside, consistent brand visibility was a building block for trust for nearly 50% of shoppers.
According to the report, against this backdrop, 93% of marketers expect their Q4 retail sales to outperform last year, with none expecting to “significantly underperform.”
Performance is also coming sharply into view, with 79% of marketing spend funnelled into performance in the Q4 Golden Quarter.
Further, the report noted that nearly 90% of brands expect H2 marketing budgets to grow, with 93% expecting sales from the peak period to beat last year's results — even if most say just slightly.
The risk here? The report outlined that with a market planning for growth while demand is being edited down, budgets could be exposed if peak conversion lands “softer” than optimism assumes.
Top tips for brands
What does this mean for brands trying to convert shoppers?
The report recommends investing in retail moments that deliver strong conversion without the same level of competition and treating retail media as a “trusted asset.”
The report also noted that brands should ensure that partners capture impact across full cross-channel activation. According to Epsilon, with the data marketers currently receive from advertising partners, 55% can’t confidently plan across channels.
Further, maintaining visibility throughout the period is an effective tactic for building familiarity with shoppers, the report said, and to facilitate this, brands should reserve budget for brand activity.
