The internet has impacted every area of our lives, from communications to media and education. One area that has had a huge impact on the way we live is the rise of online commerce. In 2020, the online retail sector represented a revenue of 4.2 trillion dollars globally. Giant online marketplaces like Amazon and Chinese operations JingDong and Alibaba collectively brought in half a trillion dollars through sales on their platforms. In this new economic reality, brands need to recognize the options that are available to them to market and promote their products, and to orient their strategy towards maximizing discoverability, novelty and exposure in a marketplace that is saturated with over 3 billion customers globally.
Internet Generation :
Looking to the spending habits of adults in the 18-34 age demographic yields key insights about what sort of promotional strategies are popular now. As this age group is increasingly populated with members of Gen-Z, who as a result of being born after 1996, are also commonly referred to as the internet generation. Their spending habits and behaviors reflect the fact they are accustomed to accessing online services, and have an extremely high level of computer literacy when compared to older age groups. These consumers now make up 40% of the workforce in the United States as of 2020, overtaking Millennials. Gen-Z work remotely and from home more than other generations, this is due in part to them joining the workforce as a time when attitudes towards remote work are shifting and are now actively encouraged in most professions.
On-Demand Entertainment :
Professionals who work remotely have specific preferences that orient them towards seeking entertainment from online and on-demand platforms. With such people working hours that do not fit with the traditional 5-day week, being able to access entertainment products in their unpredictable downtime becomes a determining factor in where they spend their free time and money. Footfall at traditional physical gaming institutions is decreasing, and this is in part due to this shift in consumer demand as the pace of modern media increasingly makes brick-and-mortar institutions slow to react and adapt. In contrast, online gaming services can present bespoke offers to new patrons like free spins and daily jackpots on slot titles that further increase the appeal of their products among this demographic. This is similarly reflected in video games, where game franchises such as Call of Duty relied on the ease-of-access to their product to up-sell players on customization microtransactions to the sum of $500 million in 2020. The same goes for Fortnite, which relies entirely on microtransactions. Developers Epic Games reported this model resulted in a revenue of $1.8 billion for the immensely popular game in 2019.
Targeted Advertising :
Utilizing the social graph, a term originally coined by Mark Zuckerberg, is of crucial importance for brands seeking modern promotional strategies. Large internet companies like Facebook and Google acquire 97.9% and 70% of their income respectively through the sale of collated information about their users to advertisers. Collectively this amounts to a marketing database that captures 50% of the global population. As such, any large scale promotional campaign must utilize the targeted advertising services on offer on these platforms in order to extend their reach and ensure their campaigns are connecting with the right demographics.
Discounts and Promotions :
Promotional discounts are a massive business, with online coupon and e-commerce marketplace Groupon now ranked as the 8th most lucrative commercial operation on the internet. The brand hosts offers and discount coupons for local businesses in 500 cities internationally and has over 50 million active customers in 48 countries. Now payment company PayPal has entered the space with their viral sensation, Honey. This product is a web browser extension that searches the internet for coupons and promotional codes to apply to items in your shopping cart, thus automating the discount/promo process. Honey offers an average 17.9% discount on products from any of its 30,000+ merchants, and has gained visibility rapidly due to its brand association with PayPal. Working with these companies is an efficient way to increase discoverability and drive up sales for small and large businesses alike.