The end of the year is in sight, and the retail sector is currently gearing up for the silly season. With The National Retailers Association predicting that Australians will spend $62.97bn over the Christmas sales period, it’s all hands on deck for those working in the retail and e-commerce sectors.
To speak about how News Corp is making the most of the upcoming holidays and how advertisers are responding to economic conditions, Mediaweek spoke with News Corp’s Mark Brownie, general manager digital revenue and Adam Kron, director e-commerce, client product and strategy.
With Black Friday and Christmas just around the corner, Kron said that News Corp’s biggest challenge will be navigating the current economic climate.
Kron: “The big topic on everyone’s mind is how the interest rates and the current cost of living issues impact people’s ability to spend. We’ve got data to show that 73% of households have stretched budgets, and that these issues are impacting their ability to spend.
“On the flip side, that really highlights the importance to the consumer world of having great deals and sales, which might help concentrate a bit more of their spending around this particular period leading up to Black Friday. What we’re expecting to see is a lot more spend on non-discretionary items, less on discretionary, lower bucket sizes, less impulse buys.
“It also will help highlight the importance of getting really good, credible advice and recommendations to help consumers find those deals and solutions, which is what we’re very much focusing on at News Corp.”
The importance of those deals and sales sees consumers hunting down bargains over brand loyalty. Kron said that advertisers responding to this shift in a number of ways.
Kron: “Consumers will be looking for great deals to help alleviate budget concerns, which we expect to include increased online research, and finding trusted sources. The trust can come both from independent credible sources such as news.com.au Checkout, but also brands and retailers can create trust with advertising strategies that reinforce how they deliver value.
“Advertisers may respond to this shift with appropriate messaging, but also by using efficient tactics that target consumers that are most likely to trust and resonate with the brand. The importance of targeting through tools such as Intent Connect and being able to optimise will likely be a key focus for advertisers.”
When it comes to how News Corp is helping brands cut through in this economic environment, Brownie pointed out that “There’s a direct correlation between consumer spending and consumer confidence, and marketing budgets.”
Brownie: “For better or for worse, people will cut their budgets and start to focus more on the lower end of the funnel when there’s not as much money to go around. From our perspective, we want to minimise wastage for our partners’ budget as well, which is why now shifting to focusing exclusively on intent-based addressability for our audiences is critically important.
“Over the last six to 12 months we’ve been dramatically improving the capabilities of our data offering to focus exclusively around that idea of customer intent. That can be anything from understanding what content consumption signals indicate that somebody is very interested right now in a specific type of brand or product, all the way through to data that we can put together to understand that a person is likely to be looking for a particular product right now. Our job as a business is to help our partners push those individuals through that purchase funnel.”
Driving a lot of the economic pain that consumers are in are the most recent interest rate hikes. Kron said that despite this, the retail sector is set to perform well this festive season.
Kron: “The hikes will obviously crunch consumer budgets. We anticipate that this will drive a concentration of spend around major sales periods that consumers trust will deliver them value. We also expect a growing importance around Black Friday / Cyber Monday, Xmas sales, and Boxing Day. We anticipate the focus of spend to be when consumers believe products are discounted as far as possible.”
Looking ahead, both Kron and Brownie predict a big 2024 for those in the retail space.
Kron: “E-commerce is on a long-term trajectory of growth. We’re still under-penetrated as a market – the extent to which shopping is online in Australia is behind the UK, China, America, and other comparable markets. Then there are the market conditions – obviously, e-commerce is going to be impacted as much as any other retail sector with the cost of living issues such as they are.
“E-commerce will continue to grow into 2024, and the extent to which it grows will be impacted by market conditions. But the long-term trajectory is still upwards.”
Brownie: “From a broader business perspective, everything’s predicated on market conditions, but our job is to make sure that we’re continuing to make every dollar that our partners invest with us work as hard for them as possible. In many cases, we do as many different jobs at the same time as we possibly can with that spend to affect the best outcome.
“So from my perspective and my team’s perspective, that’s our singular focus: how do we maximise the efficiency of every dollar that’s invested with us to deliver outcomes for our partners?”
Some of the biggest industries this year have been retail, travel, and auto, with Brownie predicting that investment in those areas will continue into next year.
Brownie: “Travel and Auto obviously had big bounce-back periods after COVID and the supply chain issues that impacted auto manufacturers and our job, as a partner to them and our retail clients, is to continue to find ways to ensure their marketing dollars, in these challenging conditions, are working as hard as they possibly can to deliver outcomes and grow their businesses.
“As long as we continue to do that, they will continue to value our business, our brands and our audiences.”
Top Image: Mark Brownie and Adam Kron