“Store Closing” banners are an increasingly common sight in recent years, and inadvertently, a sign of changing times.
Despite being only a few words strung across an empty store front, these banners represent the much larger effects of retail’s transition to a digital marketplace.
The e-commerce revolution challenges long-standing marketing strategies and tactics. Now, retailers are taking a new approach to win customers and keep their business viable.
Shop until you drop (or until your computer dies)
E-commerce is growing fast - nearly five times faster than in-store sales. Business Insider Intelligence estimates e-commerce sales are projected to double to $1.1 trillion by 2023.
Now, we can’t write an article on e-commerce without mentioning Amazon as it responsible for nearly 50% of all e-commerce trade.
However, e-commerce isn;t a success story for everyone. Not all retailers adjusted to meet the online demand and have been left facing devastating consequences. Notable U.S. stores like J.C Penny, Payless, and Gap once dominated the retail market, but now they are part of more than 5,000 closures that have taken place in 2019 so far.
A Wal-mart VP describes the situation saying, “The way I see it, if you are a brick-and-mortar retailer, you either embrace a digital strategy to become omnichannel or do nothing and become irrelevant”.
Enter Affiliate Marketing
As retail changes, so does its marketing. And one of the strategies embraced by retailers is, as you may have guessed, affiliate marketing.
Accounting for 16% of e-commerce sales, affiliate marketing is as effective as email marketing; and out-performs both social commerce and display advertising.
Fortune 500 companies like Amazon, Target, Wal-Mart and Macy’s are now actively using affiliate marketing. Each retailer offers their own branded program that includes a dedicated website and platform for affiliates.
Why this can work for your business too
With major retailers begin shifting their overall marketing strategy, we see the ways affiliate marketing can be a powerful (and in some cases necessary) tool for all e-commerce businesses.
Here’s why your e-commerce business needs affiliate marketing:
Affiliates wear many marketing hats
They can be your digital billboards, print ads, broadcasts and testimonials.
Regardless of whether your affiliates are marketing gurus or a beginners on social media, your product has the opportunity to be shared on a variety of platforms to a wide-spread audience.
Here’s some of the ways affiliate’s can promote your brand:
- Social media posts
- Website & blog banners
- Blog features
- Product reviews
- How to tutorial videos
Generate Strong Leads
A majority of businesses say generating traffic and leads is their biggest marketing challenge.
Affiliates are one way for e-commerce businesses’ to generate more online traffic, with 71% of marketers rating the quality of customers and traffic from affiliate marketing as better than other marketing sources.
Partner with affiliates in your niche to bring in even more targeted traffic. For example, a store selling vitamins would want to partner with fitness influencers, clean-eating blogs or YouTube exercise accounts.
Affiliate marketing is a cost-effective strategy for e-commerce businesses who do not have the same marketing budgets as large corporations.
With a pay-for-performance model, you only pay for ads that convert into sales. So, marketing budgets won’t be wasted on ad campaigns that aren’t successful in reaching customers.
Affordable Alternative to Google & Facebook
As we mentioned, most e-commerce businesses are unable to compete with the marketing budgets of large corporations - this is particularly true in relation to ad spending on Google and Facebook.
In recent years, these ads have become pretty pricey; and the bidding system makes it so that small businesses cannot get high, favorable placements without spending a large amount of money.
Affiliate marketing is an affordable alternative for getting ads online. Plus, this is a great way to optimize your SEO rankings.
Measure marketing efforts
Affiliate marketing is very measurable.
Take this example: A business places an ad in a newspaper. Based on the newspaper’s readership, the business has an idea of how many viewers they can reach when they purchase the ad. However, they can’t specifically track which customers came into their store as a result of the ad, they can only make assumptions on trends. Also, a newspaper’s audience could be pretty far-reaching, so the ad won’t necessarily target the right customers.
Affiliate marketing uses tracking links so you can know exactly where customers came from. Then, you can adjust ad placement as necessary.
Social media could work better than websites, or videos bring higher conversions over text. There’s a lot of data to clearly show what’s working and what’s not.
Plus, you’ll be able to have performance insights, so you can set different commission types and bonuses to award (and further incentive) top performing affiliates.
Effective & engaging ads
Finally, your brand can connect with customers in a way that is more aligned with their needs and desires. Affiliates have particular insights about their audience and can tailor their marketing to highlight what they think is important.
Consumers value organic material. Affiliates have the ability to reach the audience through a genuine conversation, not bound by carefully-composed words that were sent out by the business itself. This brings a feeling of authenticity, like a friend giving another friend a recommendation.
An affiliate’s insight will be particularly important if your business is operating globally. While no one can have a deep understanding of every part of the globe, international affiliates can promote your products in the right cultural context.
For example, American shoppers may enjoy an in-depth commentary alongside the product, with descriptive and vivid language. In contrast, German shoppers may want to have a more straightforward messaging that focuses on price and value.
Having this insight will make your ads much more attractive to audiences.
As the internet continues to intertwine with the functions of our daily lives, it is necessary to acknowledge and adapt to the changes (and opportunities) this technology brings. The emergence of same-day shipping and drone delivery indicate that e-commerce is a continuously growing industry with no foreseeable decline.
And, consequently, affiliates will play a significant role in the marketing strategies for e-commerce businesses of all sizes.