To remain competitive in 2024, the brands that adapt and evolve within a changing economy and digital landscape will come out on top.
We’re diving into two key trends influencing brands and the marketing strategies they can leverage to stay one step ahead.
Global consumer spending behaviors are changing
The reality: In the US and EU, consumers are approaching 2024 cautiously optimistic with their discretionary spending due to large-scale macroeconomic factors.
Broader economic drivers such as high-interest rates, inflation, and global conflicts are influencing consumer spending behavior in 2024, but to what extent?
US consumers might be tightening the reins on their extraneous spending in 2024, though not to the degree once anticipated. Forecasts estimate that US disposable household income growth will drop from four percent in 2023 to three percent in 2024, yet significant (or maybe even noticeable) declines in consumer spending aren’t on the horizon. Declining sentiments around a potential 2024 recession make for a promising outlook as well.
European consumers might also be following suit, though the projections are still somewhat mixed. Despite continuous price increases, European consumers currently maintain their most positive economic outlook in a year. Even with this optimism, European consumers are spending less across many nonessential categories in an effort to prioritize necessities. The total consumer spend however will likely remain the same when taking inflation into account.
Both Gen Z American and European consumers however, have shown the highest intent to splurge in 2024. In other words, the opportunity for brands is ripe, but so is the competition. Globally, brands are faced with the challenge of boosting profit margins while battling competitors to win over consumers in 2024.
The strategy: Attract price-conscious consumers with added value across the entire customer experience.
2024 isn’t an invitation for brands to get too comfortable. Consumers are making smarter discretionary spend choices. To stay competitive, brands must deliver value across the entire customer experience. Shifting to a holistic, customer-centric strategy that prioritizes the winning combination of discounts, flexible payment options, and exceptional return policies is the clear path forward for brands in 2024. Here are three strategies to set your brand apart:
1. Partner with affiliates to share discounts
To attract savvy consumers, brands can leverage affiliate partners to bolster their reach by providing enticing discounts and even free trials. The affiliate channel’s measurable, pay-for-performance approach has historically offered one of the most resilient and adaptable channels available to brands. In 2024, this will continue to hold true.
With affiliate marketing, it’s a win-win situation. Consumers secure a sought-after deal. Brands gain greater campaign control, increased profit margins, and more clarity into their return on ad spend (ROAS). For example, customers acquired through affiliate marketing campaigns often drive $12 in ecommerce revenue for every one dollar spent to acquire them. This far surpasses the average ecommerce ROAS of $4 in revenue to every one advertising dollar spent.
2. Enable buy now, pay later financing services
In the era of fluctuating interest rates and ongoing inflation, providing flexible payment alternatives like buy now, pay later (BNPL) can distinguish your brand from the competition. BNPL short-term financing options serve as the catalyst for 30 percent of shoppers on whether or not they actually make a purchase.
By 2026, $995 billion in consumer spend is projected to funnel through BNPL services, a $769 billion increase from 2021. Brands that leverage BNPL services (e.g. Klarna, Affirm, Afterpay, etc.) typically see a 17 percent boost in incremental sales plus a 15 percent increase in average order value (AOV).
3. Provide favorable return experiences and policies
The influence of attractive return policies should not be overlooked by brands focused on increasing profitability. Great return policies generate more sales, reduce returns, and enhance brand perception.
What’s more, 95 percent of online consumers feel that a positive return experience also impacts their continued brand loyalty. Conversely, roughly 80 percent of US online shoppers feel that a subpar return experience decreases their likelihood of shopping with that brand in the future.
To differentiate your brand, implement these specific strategies:
- Go beyond the standard 15-30 day return policy and offer more enticing policies, for example returns up to a year or even lifetime returns if possible.
- Simplify the entire process by automating returns and eliminating return shipping and restocking fees.
- Ensure your return policy is transparent and accessible at the time of checkout to instill confidence in consumer purchasing decisions.
Google’s cookie deprecation is set for the first quarter of 2024
The reality: Google is phasing out tracking cookies for one percent of Chrome users beginning January 2024.
Google is on the brink of finally fulfilling its promise to eliminate third-party tracking cookies from Chrome.
The journey to a cookie-free Chrome has been anything but linear. Google originally announced its 2020 initiative to phase out third-party cookies by Q2 2022. The cookie deprecation hit a delay and was pushed back an additional year, with a new date set for late 2023. In an effort to provide web users with a better (and faster) browsing experience and to strengthen consumer privacy, cookieless tracking is now going into effect in Q1 2024 for one percent of Chrome users. Third-party tracking cookies are expected to be turned off for 100 percent of Chrome users by Q3 2024.
Third-party cookies are fundamental to tracking and building audiences for remarketing campaigns and streamlining the ability to deliver targeted ads. Chrome is the most popular browser worldwide with more than six out of ten people using it during their internet searches. Failing to adapt can impact traffic, revenue, and brand reputation.
Since Chrome’s cookieless future has massive implications for digital marketers, Google released a Privacy Sandbox for developers in July 2023. This environment is available to developers to test and adopt Google’s “privacy-preserving APIs,” contribute feedback, and offer websites a preview of cookieless tracking.
While the reality of Google’s cookieless future comes as no surprise, the impending deadline might finally accelerate advertisers to rethink their soon-to-be-obsolete tracking methodology.
The strategy: Implement server-to-server tracking to protect your traffic and revenue.
The continuous delays can lead one to question the reality of a full cookie phase-out by 2024, but failing to adapt can also be detrimental to your business.
Brands running an affiliate marketing program need performance-based technology that delivers server-to-server tracking that both offers the most accurate approach to measurement and complies with consumer privacy requirements.
This is how server-to-server tracking works
An anonymous consumer’s interaction is assigned a unique ID (UID). In place of a cookie, a click ID or session ID can be stored server-side, or within the advertiser’s first-party cookie, until the point of conversion. When the conversion occurs, the consumer’s click is attributed to their conversion through the UID. Because server-to-server tracking does not depend on cookies that can be blocked by a browser or cleared by a consumer, this tracking method is the most accurate approach to measure affiliate marketing campaigns.