How Affiliate Marketing Can FutureProof Your Retail Business

With rising inflation and persistent supply chain disruptions, it's almost inevitable that retailers will increasingly rethink their marketing budgets. Companies can be tempted to cut marketing expenses when facing an economic downturn because they focus instead on short-term profits and sales funnels. But you know the old saying: "He who does not learn from history is doomed to repeat it."

After the Great Depression , the Harvard Business Review looked at how companies performed during and after the historic recession by tracking advertising spending versus corporate profits from 1920 to 1924. The results showed that companies that cut advertising budgets marketing for short-term gains saw no long-term results. urgent benefits. . The study also found that companies that maintained marketing spending during the economic downturn grew faster than those that didn't.

Given the current financial situation in the US, companies are now less risk averse and budgets across all divisions are being tightened. This is increasingly becoming a reality for businesses of all sizes, from traditional retailers to corporate giants. So how do retailers increase ROI and continue to innovate during an economic downturn? There is no one-size-fits-all solution, but there are sales and marketing practices that have been shown to deliver high returns on ad spend and growth, even in a volatile economy.

Participate in affiliate marketing, sometimes called an effective partnership. Affiliate marketing is a performance-based model, which means you only pay for the results you want, whether that's sales or leads. This performance-based model offers retailers a 12:1 ROI and is highly profitable in times of economic downturn.

Pay according to performance model increases budget

Many Fortune 500 companies can penetrate difficult markets, while most small retailers cannot. One of the main benefits of the pay-for-performance model is its manageability and scalability for companies of all sizes.

Companies with limited marketing budgets can experiment with their marketing mix in a profitable environment by optimizing sales methods such as promotions, referral programs, and membership benefits. A/B (A/B) capability to test layouts and determine the most effective ads means not a single dollar is wasted.

Simply put, this approach increases marketing budgets and ensures sustainable growth.

Connecting you with customers at all stages of the sales funnel

During the pandemic, foot traffic almost stopped and e-commerce skyrocketed. According to IBM's US Retail Index, the pandemic has accelerated digital growth for five years.

This surge in online shopping has highlighted the myriad of digital touchpoints where shoppers can interact with brands. Through affiliate marketing, retailers can partner with multiple pre- and post-purchase digital revenue streams, from coupon and cashback sites to on-site optimization technology and AI-powered chatbot algorithms, to Leverage your marketing efforts to increase online sales. and income.

Customer experience preferred

The consumer price index (CPI) reached its highest level in two decades, with a year-on-year increase of 9.1%. While economists note that inflation is peaking, buyers remain very cautious with their budgets. The pandemic, coupled with record inflation, has radically changed the buying behavior and mindset of consumers.

With affiliate marketing, consumers can do whatever they want. That's because affiliate marketing goes beyond traditional display advertising and promotes your business through multiple mediums, influencer channels, cashback portals, and coupon sites, meeting your customers where they shop.

The bottom line is that affiliate marketing opens up new revenue streams within your existing marketing budget, regardless of inflation. stagnation or no stagnation. Performance-based models maximize every dollar spent with a 12:1 ROI and engage potential customers the way they want, which becomes increasingly important in turbulent times.

Alexandra Forsh is the President of Awin, a leading affiliate marketing company.

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