In 2023, many lifestyle retail brands faced tough challenges amidst market turmoil due to inflation, weak consumer demand, and changing market dynamics playing a key role.
This situation is due to consumer tightening, a shift from the post-lockdown demand surge, as evidenced by the sharp decline in personal savings rates from record highs during the pandemic, and the steady decline seen in previous years. This was further exacerbated by household balance sheets. U.S. households are saving up to 30% of their monthly income, the lowest level since 2008 by the end of 2023.
But despite these obstacles, there are some tactical similarities between some action sports brands and fashion apparel brands, and these brands have not only weathered the storm, but thrived and continued their momentum. will continue until 2024.
After its acquisition from Boardriders, Xcel Wetsuits decided to refocus on the importance of website user experience (UX) and optimization to improve conversion rates, especially on mobile devices.
Understanding that consumers research wetsuits thoroughly before making a purchase, we invested in high-quality product photography, optimized our product pages to quickly answer customer questions, and created a web-based web site all the way to checkout. We have eliminated friction across the site. This strategic move increased the website's conversion rate by 27%, despite increasing overall traffic by 28%.
The brand's digital marketing strategy has also undergone a major transformation, moving from extensive awareness and traffic generation campaigns to a focused effort to optimize its website to maximize conversions.
In fact, this approach includes strategic investments in platforms like Meta for new customer acquisition and improvements to the product feed in Google Ads to improve the performance of Shopping ads. Overall, contributing channel revenue increased by 57% year-over-year and conversion rates increased by 29%. .
“People think that increasing spending to increase traffic is the key to increasing revenue, but this is not the best option. Find qualified traffic, optimize to improve conversion rates, Focusing on using high-quality product creative is a surefire path to increased revenue.” – Ian Stewart, CMO, Xcel Wetsuits
Beak, founded in 2015 by former Roxy executives Kenna Flory and Birgit Klett, saw its e-commerce business grow 41% in 2023.
The brand's continued success has been built on an unwavering commitment to consistency and year-on-year learnings, from messaging, marketing and website user experience to paid media, customer retention and creative strategy. This is thought to be due to.
In other words, over time, they have consistently refined and improved the quality of each customer touchpoint, with an emphasis on messaging. seamless commerce experience.
After an impressive 58% year-on-year growth in 2022, Beek remains focused on building on its success and effectively driving new customer acquisition, particularly through Meta, Google Ads, Affiliates and Direct Mail.4 We focused our efforts on two key areas.
Despite increasingly limited audience targeting capabilities, especially for Meta, the platform remains highly effective at brand discovery.
The ad creative itself has effectively become the primary targeting vehicle. Leverage ad creatives designed to be personalized to your target audience, combined with the strategic inclusion and exclusion of existing customer segments synced through integrations with email service providers like Klaviyo In doing so, this algorithm (which is now nearly 20 years old) is still very good. It helps you know when and where to get your ads in front of your ideal potential customers.
“Given the number of channels, data and tactics available to marketers today, it can be tempting for brands to be distracted from focusing on fundamentals. Sustaining our brand online The key to our growth has been consistency in our creative and messaging with a focus on product quality, fit and comfort in every interaction our customers have with our brand.” – Kenna Florie, co-founder of beek
Matt Laminik is the founder and CEO of. Hinatais a leading performance marketing agency that connects creative and business performance to drive revenue for surf, snow, outdoor and fashion lifestyle brands. Before founding Sunnyside, Matt held senior marketing positions in digital marketing at Quiksilver, Volcom, and Pacsun.You can contact him at linkedin And then matt@sunnysidecalifornia.com
Additional information – Further insights into retail in 2023
Retail growth faced several headwinds in 2023, with inflation, weak consumer demand, and changing market dynamics playing key roles. Persistent high inflation and weak consumer demand directly impacted US retail sales expectations, resulting in minimal growth. The situation has worsened further due to a surge in demand following the lockdown and a reversal of the strong household balance sheets seen in previous years, with consumers tightening their belts. Retail sales for the key shopping season were lower than expected, showing that recession concerns and a cautious approach to consumer spending have had a major impact on the retail industry. Furthermore, rising household debt and declining personal savings are further straining consumers' spending capacity. Learn more about S&P Global.
The retail industry also had to navigate volatile economic conditions characterized by Federal Reserve interest rate hikes and inflationary pressures. Although some consumption patterns were supported by higher wages and lower savings, consumer collective sentiment was expected to be damaged and lead to market exits. Click here to learn more about Deloitte.
Luxury retailers in particular faced unique challenges and opportunities. Changing customer expectations, social and environmental concerns, and geopolitical events have required luxury retailers to adapt quickly. The rise of Millennials and Gen Z as key buyers in luxury retail has led to a shift toward value-based shopping, trust, and innovation, with a preference for a unified experience across digital and physical channels. Now you can Today's consumers expect luxury brands to align with their values and demonstrate a commitment to environmental and social causes, making sustainability, purpose and ESG visibility paramount. I am. Additionally, consumer interest in sustainable alternatives and a desire for timeless quality and authenticity has led to significant growth in the luxury goods resale market. Click here for details on SIA.
