Small retailers are expanding their social media engagement in time for the peak season, new Shopify research reveals.
A previous report found that SMEs are rolling back their paid ad spend due to pending privacy regulations. Despite this, paid ads still ranked as the second most popular strategy for attracting new customers this peak season.
The following social media-related strategies are being used by retailers in attracting and retaining customers:
- 70 per cent of SMEs said they would prioritise social media engagement for customer retention, followed by providing exclusive offers and promotions (42 per cent) and enhancing customer service (38 per cent).
- Organic social media content (47 per cent) and paid advertisements on social media (32 per cent) ranked as the top two strategies for attracting new customers, with a substantial 72 per cent citing strategies related to social media, affiliate marketing and influencer partnerships overall.
- 63 per cent said they will leverage social media platforms for direct sales.
Seasonal strategies
The report found that Australian retailers are focussing on several key strategies for their peak holiday season plans:
- Expanding into new product areas (31 per cent)
- Improving ROI on marketing spend (30 per cent)
- Reducing operating cost (27 per cent)
- Expanding into new sales channels (22 per cent)
Shopify also noted that these strategies reflect the current economic climate and its impact on consumer spending, both of which remain foremost in the minds of retail entrepreneurs.
Despite such concerns, 33 per cent of Australian retail entrepreneurs are optimistic about the upcoming peak sales season, particularly for Black Friday/Cyber Monday, though 35 per cent are feeling less optimistic.
Moreover, Australian businesses are looking resilient amid the challenges. Their drive to adapt and innovate to meet the needs of today’s consumers remains strong, according to the report.
Cost of living concerns impacting consumers and retailers alike
The report also noted that a rising cost of living and inflationary pressures continue to be the driving factors behind consumer habits, a key concern for retailers. Small retailers have cited consumer spending levels (77 per cent), inflation (76 per cent) and local economic conditions (71 per cent) as factors that have affected consumer behaviour as of late.
As a result, 44 per cent of retailers have noticed an increased customer interest in discounts, while and 43 per cent have noticed an increase in price sensitivity. Meanwhile, 51 per cent have noticed a decrease in discretionary spending, while 50 per cent cited a decrease in frequency of spend, and 36 per cent noted a decrease in average order value.
The report underscored that these factors have pushed merchants to revisit their pricing strategies, targeting new audiences, and introducing compelling new offers to remain competitive. Among these strategies are:
- 48 per cent are adjusting pricing strategies to remain competitive, while 46 per cent are increasing promotional activities to boost sales.
- 37 per cent are investing more in digital marketing to reach broader audiences.
- 28 per cent are shifting focus to more cost-effective products.
- 24 per cent are redesigning their marketing messages to emphasise value and affordability.
Shaun Broughton, Managing Director, APAC at Shopify commented, “As Australian entrepreneurs navigate the current economic climate ahead of the holiday season, it is crucial that they not only deepen their engagement on social media — where their customers spend significant time — but also remain agile in responding to growing price sensitivities. Investing in technologies like AI that drive greater efficiencies while reducing costs, has also emerged as a valuable strategy for improving business readiness.”
“Black Friday/Cyber Monday and the broader holiday season present a valuable opportunity for businesses to explore new initiatives and strategies to maximise reach and help them stand out. Although venturing into new markets or adopting new technologies can be daunting, it is important to think creatively and stay forward-focused,” he added.
