Marketing in the USA

Many of the promotional tools available to retail marketers globally were born in the US. This section reviews some of these methods whilst also highlighting key opportunities. As ever, though, localisation is key, and whilst the tools might be familiar, their implementation can be very different. Peak trading is a good example.

As with other markets, there are peak trading days for retail in the US and these are reflected online. The main holiday-based shopping days are around Thanksgiving and Christmas. Thanksgiving is celebrated on the fourth Thursday of November, with the following Friday being Black Friday.

The following Monday is Cyber Monday, traditionally the peak online trading day. Cyber Monday scores strongly, as consumers can do a lot of research over the preceding few days and then look online to make sure they are getting the best deal. It was originally a day designed by pure-play merchants to counteract the peak for in-store shopping, Black Friday. Recent years have seen an increase in promotional activity online for Black Friday.

Other retail days are important but not to the same extent. According to the National Retail Federation’s Retail Insight Centre, average spending on back-to-school items has increased by 31% since 2004 to $72.5 bn (€57.9 bn). Mother’s Day and Valentine’s Day are significantly more popular than Easter, while Halloween is growing in popularity. The Super Bowl (final) weekend in February is also a major US retail event.

Global merchants will be well aware of certain key peak trading periods. However, there are some subtle differences in the US market with Black Friday and Cyber Monday being the key days that consumers are well aware of. A plethora of websites exist purely to provide consumers notice of where the best deals can be found on these two days. For example,

Also worth noting is the way in which consumers’ shopping habits are changing around these peak times. Not only are they increasingly going online, the device type used is changing. 46% of all online purchases were done via mobile device on Thanksgiving 2016, 32% of which was via smartphone.

TAKEAWAY: Mobile and desktop need to be part of any US strategy. Plan for peak and understand the local nuances of these days.

Digital advertising in the US rose 19.1% in H1 2016 to $32.7 bn, according to the Interactive Advertising Bureau (IAB). Historically, H1 represents 53% of the annual total and following that trend, total ad revenues for 2016 which are yet to be reported, should be circa $67 bn.

Reflecting the increasing importance of mobile, the IAB also reported that mobile advertising grew from 30% of total ad spend in H1 2015 to 47% in H1 2016; a figure that is sure to increase as mobile becomes more entrenched in consumers’ digital interactions.

Social media advertising, still largely an unknown quantity for many merchants, represented returns of $7 bn in H1 2016, an CAGR increase of 54% over the previous year. Its prevelance within the USA evident when viewing our internet usage and connectivity in the USA page.

Search revenues have stabilised, being a more established advertising channel. However, they are massively shifting in terms of device usage. Desktop search was down 12% on H1 2015 to $8.9 bn, whilst mobile search now represents $7.4 bn.

TAKEAWAY: Mobile-optimised advertising is a key component for any US digital advertising strategy.

Social Media

The prevalence of mobile devices is also reflected in social media interactions within the physical retail environment. A 2015 report by Deloitte Digital showed that shoppers purchasing baby / toddler and home furnishing categories were particularly likely to engage in social media. This has obvious implications for marketers in these categories, both in terms of brands wanting customers to convert in-store and those pure-plays looking to tempt consumers with an online purchase.

TAKEAWAY: Develop a localised social media strategy that matches category expectations, especially in the baby and home furnishings areas. Consider building in video content for increased effectiveness.

Email marketing

As part of the marketing mix, email marketing still provides an important tool for driving sales, both online and offline. As with all marcomms activity, the key to effectiveness is in the offer. US consumers respond well to free delivery offers, with 54% in a 2015 UPS survey saying that this would prompt a purchase. Marginally behind, at 53%, was a discount offer. Interestingly, store events and direct mail still played an important role for many consumers.

Of all verticals, research shows that retail customers are being the most proactive in adapting to the emergence of mobile and tablet devices, leading the way in numbers opened on tablet, and second only to media and entrainment on mobile. According to Experian Marketing Services North America in Q4 2016, 56% of total email opens occurred on mobile phones or tablets in Q4 2016, matching the percentage seen in Q4 2015. By contrast, only 41% of emails are opened by retail customers on a desktop.

US consumers are still using desktop, so whilst mobile is important, brands should not neglect the ‘traditional’ email experience, but rather adapt and acknowledge the different requirements of each device.

The Experian report also highlighted some interesting developments in email marketing for the consumer products & services sector. Open rates in Q4 2016 were up from 25% in 2015 to 29% in 2016. Revenue per email was also up, as were average order values which moved from $101.41 to $116.10.

TAKEAWAY: Email marketing is still a key tool in marketing to the US consumer. Ensure the offer is valid and that priority is given to relevance.

Direct Mail

Direct mail still plays an important role in US consumer product discovery. According to the US Postal Service, consumers receive 16 pieces of direct mail per week, compared to over 100 emails. 70% of direct mail is opened and 79% read for at least one minute.

44% of this mail is discarded immediately if it isn’t relevant whilst 80% of consumers are more likely to open personalised messages. According to a DMA study in 2015, of those consumers who responded to direct mail, 54% went to a referenced website and 45% went on to make a purchase.

As a result, direct mail in the US competes very favourably with its digital counterparts. The DMA report recorded response rates of 3.7% for direct mail, against 0.2% for email and 0.1% for paid search.

TAKEAWAY: Whilst comparing favourably to digital marketing techniques, the ability to scale and individual performance metrics won’t make direct mail right for every business. Perhaps plan to use as a retention tool.