Of the many pivots that brands have had to manage in the past 12 months, the impending wave of “revenge spending” is likely the most highly anticipated. Revenge spending is the term being used for the pent-up demand for everything people haven’t bought lately, from work clothes to flights and even weddings. At the same time, many people are expecting employment to be more secure by the end of the year and may decide to treat themselves after a long and stressful pandemic. Therefore, purchases such as fancy dinners out and luxury goods will fall into the revenge spend category, too.

To capture this coming demand for basically everything nobody bought for a year is easier said than done. Brands have spent millions of dollars and countless hours on messaging for cautious, online, at-home shoppers. Now they not only have to unwind some of that work, they have to preserve elements that remain popular like curbside pickup and online grocery ordering, while adding new messaging and fulfillment for a completely different set of new behaviors.

Find Your Starting Point

The impact of the pandemic was felt differently across retail categories driven by consumer at-home behaviors. According to the U.S. Census Bureau, clothing experienced a 26 percent decrease in sales last year as a whole. However, impact also varied within categories of apparel. Special occasion and office workwear businesses were hit hard, while athleisure brands such as Gymshark thrived with a 32 percent increase in year-over-year sales. Each brand within each category is therefore starting in a different place as the pendulum shifts from pandemic buying to recovery buying.

Brands will be best served to create different planning scenarios as the demand for different product will be hard to predict in the next six months. For Gymshark, now that everyone has a closet-full of leggings, new demand may be low. On the other hand, if people stay home to work at least a few days a week, it might stay elevated. It will be important to use as much real-time searching and shopping data as possible to assess the change in consumer demand. That data can inform not only spending on media, but also on personalized messaging. Gymshark can create different campaign plans that show how athletic wear can be worked into outfits for work and going out vs. another that celebrates a full-time switch to remote work, for example.

On the other side of that coin is a brand like Brooks Brothers, which saw a dramatic decrease in sales in the past year. It will be watching carefully to see if people come in to treat themselves to some high-end suits on their return to business travel, or if a permanent shift away from formal workwear is in its future, with different marketing approaches to match.

Focus on Customer Connections

Creating a direct relationship with the customer through digital channels will provide brands with a connection even when people go back to in-store shopping in full force. Adidas is an example of a major brand investing in direct to consumer (D-to-C) through the pandemic and beyond as part of a four-year strategy. The athletic brand is betting on sustained e-commerce activity, and is building up its first-party data and personalization capabilities to ensure it can market to customers as their tastes change. Perhaps Adidas will sell fewer sweatpants next year, but people may embrace the option of sneakers at work if the look is right.

Sailthru surveyed 5,000 consumers to see which brands they would be most likely to purchase from in the next six months, and the top 10 includes brands like Food52, Torrid, and The Home Depot (and of course, Amazon.com). It’s no surprise that these brands ranked very highly in this year’s Retail Personalization Index, as they focus on data-driven personalization and relevant experiences across every channel. Interestingly, Chanel also made the top 10, a sign that revenge spending is indeed on the horizon. Brands in categories like luxury and travel, which will soon see that anticipated uptick in demand, should check out the customer experience from brands that have fared well.

For example, Brooks Brothers could introduce quizzes and surveys on its site to learn more about what types of fashion people are interested in. For example, it could ask, “what pieces ‘suit’ you this season?”, which would help with personalization and retailing.

Here are several customer engagement ideas to develop as part of a good revenge spending plan:

  • Win-Back: Build a win-back strategy for customers who were previously best customers, but perhaps were financially impacted last year. This group of customers should still be acknowledged as top customers and offered exclusive incentives with a brand they love.
  • Aspirational Campaigns: Build campaigns that fulfill the dreams people have had for the past year that focus on potential occasions, travel, and return to office. Be sure to target based on geo-location, as restrictions vary based on where your customers live.
  • Data-Driven Engagement: Channel engagement will be key to ensuring the welcome-back experience is optimal for picking up the customer relationship prior to the pandemic. Monitor how best customers are now engaging. See if they’ve shifted their email activity. Friday was the new best email day during the pandemic, but it might not remain so. Similarly, mobile shopping surged, but the use case may change as people go back to work and visit stores more frequently.
  • Integrate Digital and In-Store: Maintain omnichannel as a priority and part of the in-store experience. Many store-only shoppers became omnichannel as a result of the pandemic, and while many may prefer an in-person experience, online should always be available to provide convenience and value to their experience.

Stay Flexible

While the upcoming surge in spending is weighing on the minds of marketers everywhere, it’s just that, a surge. At some point, shopping behaviors will level out to a new normal, for real this time. Understanding what habits people took with them during the pandemic and during their revenge spending summer should inform longer-term marketing plans. From true omnichannel customer experiences to unified data and personalized messaging, marketers must stay flexible through this next phase and beyond.