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As the COVID-19 cases peak around the world, the glimmer of hope is starting to appear again… in life and business! The Wuhan city in China recently lifted its lockdown, and the world witnessed a new phenomenon in the business sector known as ‘Revenge Spending’. This term was coined to describe high-end shoppers splurging on luxury goods and items. For instance, the French luxury brand Hermes recorded a whopping 2.7 million dollars in sales on its first day of reopening.
This phenomenon is deemed as the start of a new dawn. But revenge spending goes beyond unbridled spending sprees—businesses stand to earn huge profits from this trend! The real question is, are you prepared for it?
If you’re interested in leveraging this mammoth of a business opportunity, you need to understand the real mindset behind this phenomenon. For one thing, the spending spree is due to the pent-up buying hunger of consumers that is being unleashed now.
But more importantly, you need to observe the buying pattern that will soon be taking shape. Online shopping has skyrocketed in Singapore! This has reflected in the rising stock price of NYSE-listed Sea Group that owns the Singapore based e-commerce site Shopee, which reached an all-time high of USD 62.91.
However, when it comes to automobiles, houses or travel, people aren’t going to show the same attitude towards such experiences. The recession has made every buyer extremely wary of making any big moves. On the other hand, retail goods can give people instant gratification. So, it’s an excellent way for people to satisfy their spending cravings without emptying their pockets! The future weather cast – Products > Experiences.
As luxury retail sales take off post-COVID-19, it is imminent that low-budget brands will also come into the picture, as high-scale spendthrifts are only a tiny stratum of the consumer market. As a business owner, you need to identify your e-commerce opportunities in this revenge spending trend and cater to them accordingly.
So, how can you cash in on revenge spending? The answer is digital marketing.
Although digital platforms have always been our biggest ally, COVID-19 has helped businesses realise the true power of digital tools! People are searching for a variety of products online. This is where SMEs need to start looking for opportunities to secure future revenue streams.
To predict the most in-demand products, you should know how often your consumers are searching for the same item and whether the product will be just as popular in the future. The best place to figure this information out is Google.
SEO analytics tell you about future buying trends and changing customer mindsets with precise data mapping and consumer behaviour. This data can be leveraged to build effective marketing campaigns and increase ROI. Any SEO agency can help you procure this data.
Apart from providing instant gratification, it’s also imperative to keep convenience in the mix. A luxury brand can easily attract its target audience, as they aren’t looking for bargains or shopping convenience. But for SMEs, a cost-effective model can do wonders in capitalising on the revenge spending phenomenon.
E-commerce is going to be a new reality for businesses and consumers, as it’s affordable, convenient, and most importantly, safer for shoppers. In the USA and Canada, e-commerce sales grew by 129% during the pandemic.
Moreover, an e-commerce business model can help you expand your brand presence across regions. Plus, marketing your e-commerce website becomes much easier with SEO, social media apps, and email.
If you’re looking for a success story out of China, here’s one for you. The fresh food e-commerce platform Meicai has jumped to the number 4 slot in app downloads on App Store. The brand will also be recruiting an additional 6,000 drivers and 4,000 food sorters to keep up with the increasing demand.
We are witnessing a never-before-seen trend in the digital world. Even with limited sales, the revenge spending mindset is creating tons of data to be analysed! SMEs have the opportunity to develop highly effective marketing campaigns and generate maximum ROI.
References:
https://www.cnbc.com/2020/05/13/revenge-spending-by-the-rich-could-drive-luxury-recovery.html
https://fortune.com/2020/03/12/chinese-luxury-industry-rebounds-coronavirus-revenge-spending/
https://www.searchenginewatch.com/2020/05/19/ecommerce-and-seo-past-present-and-post-covid-19/