The global home improvement market has surged in recent years – 2020 saw the market size surpass $762.9 billion, and it looks like it will continue along that trajectory for the foreseeable future. This surge is commonly attributed to more people spending time at home due to the global pandemic. However, stay-at-home guidance hasn’t only resulted in increased home improvement spending, it’s also meant that demand for e-commerce and general online services has skyrocketed. One reason for this is the fact that consumers are choosing to leverage laptops, smartphones, and tablets to do their online shopping over physical stores, from both a necessity and preference standpoint.
As consumers migrate to a digital-first approach to shopping, digital advertising has increased. Although traditional forms of advertising such as TV, radio, and print are still important, digital advertising has outstripped all other advertising forms, especially in the home goods and appliances sector.
For retailers in the white goods market, investing in digital ad spend is no longer an optional concern, it’s a necessity, and here’s why…
Consumers are spending more
There’s been a home appliance boom since the onset of the pandemic in 2019 and it’s continuing to rise every year. In 2021, large appliance spend rose by 31% compared to the previous year. Why? Consumers are spending the income saved from reduced traveling, socializing, and transportation on home renovations.
As consumers have more disposable income to spend on home improvements, the home goods, and appliances market is investing more heavily in advertising as a whole, digital or otherwise. The rise in home improvements has driven the sector ahead of overall advertising in 2021, and a further 6% annual growth rate is projected for home appliance spending throughout 2022 and 2023. A recent Zenith forecast found that home appliance advertising spend will exceed pre-pandemic levels by more than 24% over the next couple of years.
Retailers that have jumped on the increased advertising bandwagon have reaped the rewards of their efforts. By investing more heavily in advertising, retailers have the right tools to tap into new markets and target different buyer personas, such as Generation X, Y, and Z. For example, Gen Z in the US has more than $360 billion to spend, retailers just need to have the right promotional approach to unlock that expenditure.
What does the right promotional approach look like? It’s digital.
Digital continues to drive growth
As life in general moves to a “digital-first” default, white goods consumers are increasingly choosing digital communications channels over other alternatives such as phone or face-to-face. Retailers need to ensure they keep pace with this rising trend if they want to capture new markets and increase revenues. But justifying increased digital ad spend can be a challenge. Brand building and e-commerce are just two of the key drivers that are facilitating the rise in digital ad spend. Online videos and social media are also two mediums in which white goods retailers can focus their digital ad spend efforts, by building greater brand awareness for consumers and encouraging online sales.
Paid search spend is also on the rise across the industry. Retailers seeking to target churning consumers have found that by putting more money into paid searches, it’s enabled them to win consumers from the competition in the very short window between the moment a consumer experiences a home appliance failure, to purchasing a replacement. Alongside paid search, personalized advertising has also ramped up. Social media platforms such as Facebook and Instagram have become increasingly successful platforms for white goods retailers to pinpoint specific generations of buyers with targeted digital advertising and retargeting campaigns.
As brands continue to embrace and target e-commerce in line with rising consumer expectations, digital ad spend is set to increase exponentially. Retailers are already reallocating budgets to keep pace. In 2020, digital advertising increased to 55% of home appliance companies’ overall ad spend, which marks a 4% increase compared to the previous year and tipping digital channels over into “majority of budget” territory. Although traditional advertising is still important, smart retailers are placing increasing focus, resources, and expenditure on digital-first advertising campaigns.
Now is the time to invest
So, why choose to double down in digital advertising?
The Millennial generation is getting to the point where they are either on or looking to jump on the property ladder. This signifies a huge opportunity for home appliance retailers to cater their advertising to target this generation. Why? They’re the first generation of digital natives. To reach them effectively, retailers must first adopt a digital-first advertising approach and framework.
To achieve this, it’s not just a case of developing a digital advertising campaign and executing it. Retailers must ensure delivery is clean, seamless, and unified to provide a superior customer experience, and encourage loyal and repeat customers.
Now really is the time to invest in digital ad spend if you’re a white goods retailer seeking market share of the digital native generation.
To target consumers with the right digital advertising, home goods and appliance retailers need to ensure consistency across their product range in terms of the information that’s readily available to consumers. That means that all information relating to Product Information Management (PIM) and Digital Asset Management (DAM) needs to be up-to-date and relevant.
One way that retailers can ensure this is by using a PIM and DAM solution that automates this process for them, all via AI. The ECP solution provides just that. By enabling bulk management of product information and digital assets, it ensures that all content is consistent, however many channels are leveraged. This helps to ensure efficiency internally and ensures delivery of an improved omnichannel customer experience as they’re seeing the same information, regardless of which platform or channel they’re using.
ECP’s platform also provides dual syndication for even greater efficiency, and proactively monitors all PIM and DAM content and resources. If any listings are falling below a certain threshold for content quality, your product team will be automatically alerted and can take action to improve the listing’s performance.