What’s (Likely) Ahead for Affiliate Marketing in Q4 2020

What’s (Likely) Ahead for Affiliate Marketing in Q4 2020

Packages on doorstep

As with every other month thus far in 2020, planning marketing strategies has been a bit like baking a pie that you’ve never heard of, that has no recipe to follow, in an oven that you’re not sure will actually heat up.

This is especially relevant to affiliate marketing. All those year-over-year trends and insights we’d typically rely on to help guide our client’s affiliate marketing strategies are no longer reliable.  For instance:

  • Inventory and delivery: In a pre-COVID-19 world, most retailers stocked up on inventory in preparation for the Q4 holiday shopping season; and the postal and delivery services ramped up their hiring to handle the seasonal rise in deliveries.The global pandemic, however, created merchandising issues due to conservative inventory planning and purchasing during the pandemic. In Q4, this is likely to result in lower than normal inventories and delivery constraints, particularly as more consumers buy online.

 

  • Online shopping: More than 50% of US adults plan to shop online this holiday season, a phenomenon we’ve not seen before. Even with e-commerce’s continued growth, a notable number of consumers still flocked to brick-and-mortar stores for those Black Friday deals. The generational gap is also closing, with more “older” consumers quickly adapting to shopping online.

 

 

  • New October dates to remember: Traditionally, as consumers prepare for the changing of seasons and Halloween, October has served as sort of a soft kick-off month to the holiday season. However, due to Amazon moving their Prime Days to October (13-14) instead of July, many retailers are preparing to start the holiday season and kick-off with Amazon Prime Day.Between the shipping logistics and the increases in traffic that retailers are expecting to see during the week of October 13th, brands are preparing promotions for the 40% of shoppers starting early.

 

U.S. Election Impact

In addition to a global pandemic, this is a significant election year in the U.S. Looking back on the 2016 election, e-commerce traffic fell 4.6% on election day and 10% the day after the election. Similar declines are expected this year, especially when accounting for the additional declines in consumer confidence and the global pandemic.

What’s more is that Facebook recently announced they will be banning political ads the week before the election. This is likely to create a shift in demand and new advertising competition for retailers as political ads are promoted through other marketing channels such as display.

Consumers looking for gifts and other deals in Q4 are likely to lean on trusted news sites and on the content creators they follow on social or via their websites. Brands are realizing this, which is why they are increasingly turning to partnerships with content affiliates and mass media sites in their affiliate marketing programs.

 

More Brands Leveraging Affiliate Marketing in Q4

Retailers concerned about their marketing budgets are already looking to their affiliate marketing program; for many brands around the globe, affiliate is the primary channel that’s continued to drive profitable revenue since the onset of the pandemic.

Affiliate marketing’s pay on performance compensation model has also made it a safer marketing channel for brands looking to be as cost-effective and efficient with their marketing dollars as possible.

Although a crystal ball doesn’t exist that allows us to see into the future to determine consumer behavior, it’s probable that sales, promotions and the U.S. election will impact consumer spending, especially in October.

Amazon’s new October Prime Days is anticipated to be a big week for affiliate marketing as brands partner with affiliates to push different placements and as consumers continue to respond to brands who can offer the best deal.

In affiliate programs, we are likely to see:

  • Brands increasing partnerships with deal and loyalty partners with increased rewards and cash back.
  • Partnerships with product review affiliates as more consumers lean on research to guide their purchase decisions.
  • Placements with a variety of affiliate partners.
  • Deeper discounts than in previous quarters.

 

For more insights on how an affiliate marketing program can help your business cost-effectively increase revenue with high-value performance-based partnerships, reach out to our team.