Consulting Insights

Ovative Outlook July 2023

The media landscape is ever-changing. Each month, Ovative reports on the latest marketing trends and how marketers can take action to unlock success. 

As consumers return to their daily routines and travel spending tapers, we expect them to look for ways to refresh their private lives. From lower-priced apparel purchases to beauty, consumers will find joy in “little treats.” An indicator of this shift will be Amazon Prime Day which is going on now. We expect to see strong performance for apparel, beauty, and home décor verticals. 

Keep reading for the latest marketing trends impacting brands today. 

Consumer Trends

Trend: Consumer are feeling more optimistic about the economy. 

  • Survey data from the University of Michigan and The Conference Board suggests that contributing factors to this optimism may include the resolution of the debt crisis in early June, acknowledging slowing inflation, and strong labor figures. U.S. employers added 209,000 jobs in June, and unemployment rates stayed low at 3.6%. 1,2,3

Trend: Consumers are keeping tight budgets amidst high prices.

  • While consumers are more confident in the larger economy, according to the Conference Board survey data, views of their personal finances have not changed. People are continuing to keep tight budgets and shop intentionally.3,4  We see evidence of this in Ovative retail clients’ conversion rates, which were down 39% YoY.5
  • Consumers were pulling back in areas like apparel and home improvement last month, but splurging on experiences, particularly travel and restaurants. However, Conference Board data suggests consumers plan to vacation less in the next six months, which may signal that travel spending has peaked. We expect spending to increase in areas like apparel and home improvement for Amazon Prime Day, and travel spending to slow over the rest of the year. 2  

Consumer Spending Analysis: Splurge Spending 

Did consumers splurge like they said they would? We believe consumers are biased toward splurging on experiences, but as they return from travel and enjoy summer deals, they will shift their discretionary spending back to apparel and other retail. 

Action: Tailor Marketing to Shifting Consumer Preferences

  1. Expect customers to shop less frequently and require more touchpoints to convert as they have been spending big on “experience” categories like travel and restaurants.  
  2. Prepare to target customers returning from summer travel and going back to their routines. Messaging around summer / fall essentials may resonate, especially leading up to back-to-school. 

Amazon Prime Day 2023

Trend: Consumers may splurge on lower-priced apparel and beauty items

  • Despite a tough economic climate, we’re expecting the performance from Prime Day 2023, happening now, to be strong as customers seek out deals. 79% of American adults reported they intend to shop on Prime Day, which includes concurrent savings events by Walmart, Target, and Best Buy. 11 
  • As consumers keep their budgets tight, they are embracing “little treat culture,” a viral term with almost 33M views on TikTok, which means to make small, affordable splurge purchases for a temporary mood boost. As a result, apparel is expected to be a leading category during Prime Day 2023, with 61% of Prime Day customers reporting they will spend on clothing and 45% on shoes. 12,13,14 

Lower-priced apparel will be the leading category for Prime Day 2023, happening now.

Trend: Advertisers will diversify investments as high Retail Media Network (RMN) competition is expected

With growing advertiser demand during Prime Day, leading retail media channels like sponsored search (i.e., Amazon search ads) are becoming more crowded, and therefore, more expensive. We expect to see greater investment in upper-funnel RMN channels like video and social, where advertisers can still leverage retailers’ audiences, while driving awareness for a lower price. 

Action: Prime Day 2023 Marketing Tips

  • Marketers should consider strategies and messaging aligned with spending on lower-price items, after Prime Day is over. If there is high inflation, consumers will shop intentionally, and “little treats” may be a key to unlocking retail conversions. 
  • Marketers should watch for spikes in video and social media advertising prices. Growing retail media demand may make these platforms more competitive. 

Headlines We’re Watching:

Meta Launched Threads, Its New Text-Based Social Platform

Due to its seamless integration with Instagram, the app gained over 100M followers in a week, the fastest-growing app ever. But the fate of the app is unknown as it faces a lawsuit from its rival, Twitter. Learn more about Threads and how marketers should be thinking about using the app.15 

ByteDance Launched TikTok Music

The new streaming app will allow users to sync their existing TikTok accounts, rivaling Spotify and Apple Music. While only launched in Brazil and Indonesia so far, TikTok could capitalize on its strong Gen Z user base and central role in music discovery. Read more about ByteDance’s social media “portfolio model” and their latest social app, Lemon8.16 

The Supreme Court Rejected President Biden’s Student Loan Forgiveness Plan 

The moratorium on student loan payments, which has been in place since 2020, will end in October, an event which could slow Holiday demand – particularly among Gen-Z consumers. 17 

So, What’s Next?

At Ovative, we are keeping a pulse on what is happening in the marketplace so we can best keep our clients ahead of the curve. Ovative can help your brand understand what’s going on in the media landscape and, more importantly, how to take action to stay impactful with your spend. Connect with us to ensure your marketing is reaching its full potential! 

Sources: [1] UMICH [2] Conference Board [3] U.S. Bureau of Labor Statistics [4] The Wall Street Journal [5] O/g Platform Client Data – pulled for June 1 – 18. [6] U.S. Census Bureau[7] TSA Passenger Volumes [8] U.S. Travel Association [9] McKinsey [10] The Vacationer [11] CNBC [12] TikTok [13] Smarty [14] Insider Intelligence [15] The Verge [16] Insider Intelligence [17] The New York Times 

Lillian Smith

Senior Analyst, Paid Social

About the Author

Lillian is a Senior Analyst on the Paid Social team at Ovative.

Dale Nitschke

Dale Nitschke

CEO & Founder

About the Author

Dale is the Founder and CEO of Ovative. After years of operating a large omni-channel business and leading a customer data initiative, Dale knew there was an opportunity to create a marketing firm that helped clients become more customer centric and drove better performance outcomes. A gap existed between business consultancies and advertising agencies that modern marketing approaches demand. He also believed that a strong, healthy culture could attract and develop smart, talented team members. In 2009, he formed Ovative to bring media, measurement, and consulting together under one roof to enable an enterprise approach that drives more revenue and grows clients’ customer base.

Prior to founding Ovative in 2009, Dale spent 23 years at Target Corporation where he served as President of and grew the ecommerce business from start-up stage to a $1 billion+ business and established the foundation of Target’s Guest database capabilities. Previously he served as SVP Merchandising at the Department Store Division of Dayton Hudson. Dale has advised retailers and brands globally on business, growth, marketing, and measurement transformation strategies.

Outside of Ovative, Dale is a leader on topics including business strategy, change management, and team leadership. He serves on the board of Allergy Amulet and on the Dean’s Advisory Board of the Wisconsin School of Business at UW-Madison.  He enjoys spending time with his family, up north in northern Wisconsin, playing golf, and cheering on Wisconsin sport teams.

Seth Brand

Senior Manager, Consulting

About the Author

Seth is a Senior Manager on the Consulting team at Ovative.

Amanda McCann

Senior Manager, Consulting

About the Author

Amanda is a Senior Manager on the Consulting team at Ovative, specializing in Retail Media Networks.

Jenny Reinke

Senior Analyst, Measurement Solutions

About the Author

Jenny is a Senior Analyst on the Measurement Solutions team at Ovative.

Annie Zipfel

Executive Vice President, Media

About the Author

Annie is the Executive Vice President of Media at Ovative. She oversees delivery and growth across paid and owned media (digital, traditional, and retail media) and creative services.

Annie has more than 30 years of experience in media, brand management, insights/analytics, marketing, and product. She has also developed large, high-performing teams and built new measurement capabilities. Annie led the marketing team at Andersen Windows & Doors, leading the digital, social, content, customer insights, and creative functions. Prior to that, Annie served in multiple marketing leadership roles at Starbucks, REI, Target, and General Mills, with a keen focus on brand, media, insights, analytics, and measurement.

Annie is an industry leader in brand management, customer insights, e-commerce, social media, and analytics. She enjoys hiking, traveling, cooking, fishing, and spending time with her sweet dog and two sons.

Bonnie Gross

Executive Vice President, Talent Services

About the Author

Bonnie is the Executive Vice President of Talent Services at Ovative. She is responsible for attracting and retaining top talent and creating a culture in which our team thrives personally and professionally. Under Bonnie’s leadership, Ovative has defined an industry leading leadership and development program and transformed our approach to talent recruitment with a focus on diversity, equality and inclusion. Prior to her current role, Bonnie led Ovative’s Client and Business Development team overseeing client satisfaction and new growth opportunities.

Before joining Ovative in 2014, Bonnie spent 13 years at Target Corporate as the VP of digital and Digital Marketing where she led the launch of Cartwheel, an industry-leading social shopping application. Bonnie was the VP of Marketing for Fingerhut for 15 years prior to joining Target.

Leander Cohen

Analyst, Consulting

About the Author

Leander Cohen is an Analyst on the Consulting team at Ovative.

Will Silva

Analyst, Measurement Solutions

About the Author

Will is an Analyst on the Measurement Solutions team at Ovative.

Sarah Chang

Sarah Chang

Analyst, Consulting

About the Author

Sarah Chang is an Analyst on the Consulting team at Ovative.

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