Planning for 2021: What to Expect and How to Make Sure Your Brand is Prepared
It’s no secret that 2020 was a rough year to navigate, and for many of us, the biggest excitement was watching the calendar flip over to a brighter 2021. Now that we’re here, it’s time to look forward and make sure that you and your brand are prepared for what, in some ways, will surely be another demanding year. This begs the question, what does planning for a year with so much uncertainty look like? We want to help illuminate some answers by going through some of the key factors that are sure to pop up this year and make sure you are prepared for all likely outcomes. 2021 may be the year we all get back to normal, or it may be the year we settle into some new normals, but either way we want you to feel that you are as prepared as possible for whatever may come. Let’s discuss some of the top questions we’re receiving and outline how your brand can best prepare for them.
Is retail ever coming back?
Maybe the number one question on the minds of DTC brands right now is whether or not retail will ever fully recover from the hit it took in 2020. It’s easy to foresee an outcome where retail shopping fully returns to pre-pandemic levels, especially as COVID vaccines begin to be distributed and we develop better and safer measures for returning to in-person shopping. In fact, some studies show that retail shopping has already returned to a pre-pandemic trajectory. However, it’s important to remember that the overall downward trend of retail is not something entirely created by the COVID outbreak. In fact, retail sales had been stagnating or decreasing MoM for several years, driven by a massive move to digital distribution - and that’s long before the pandemic drove us all into quarantine.
Going forward you will have to decide what the best strategy is for your brand in particular. Retail will still be around, and will likely rebound a bit, but the broader market will continue its move online, making digital advertising all that much more important for achieving scale and success. Even if you intend to focus almost exclusively on retail distribution, digital advertising is a proven way to drive intent and increased foot traffic to retail sales locations. Whatever you do, don’t let this be the year your brand is not discovered online.
How do I plan my inventory for all outcomes?
How to manage inventory in a year that offers so little in the way of guaranteed stability is an extremely important question, but one where there is unfortunately no ‘one-size-fits-all’ answer. The truth is your inventory is something that you’ll need to manage based on your own sales, stocks, and supply chain - and 2020 should be a solid blueprint. By taking a look through your own 2020 sales you should be able to get a good idea of how your brand can expect to perform in the worst case scenarios in 2021, and the good news is you can only expect circumstances to get better from there. Since the market trends seem to show that sales for most brands are projected to return to pre-pandemic levels sometime in this year, this allows you to safely plan for a year of solid sales activity. Backing it up with proper marketing and promotion to drive it becomes that much more important. We have a wealth of information on how to properly advertise your brand throughout our blog.
Will pricing for advertising change?
With digital advertising becoming more and more in demand, once could rightly expect pricing to skyrocket - but that hasn’t seemed to play out quite yet. A recent study showed that, to the contrary, price increase trends in digital marketing have flattened in the last year and show signs of continued stability throughout 2021. In fact, they estimate that digital ad prices will increase less than 2% this year. This is great news for brands who are still struggling to find their footing in the new digital landscape, the costs of promoting your brand will stay roughly the same in the near future. This should add a welcome element of stability to your plans for the new year. If you are a brand that has already found a good groove connecting with your core customer, advertising costs remaining stable means it could be a great time to do some experimental audience testing and prove out some theories you might have been a little hesitant to do in 2020.