The economic fallout from the current pandemic will likely be unprecedented, but there’s one trend developing that we have definitely seen before. After the tech bubble burst in 2001, brands embraced affiliate marketing and its ability to drive revenue on a pay-on-performance basis, with low risk and measurable ROI.
Later, during the global financial crisis of 2008, it was consumers cutting budgets. Coupons, discounts, and loyalty programs grew in popularity, as did referral partnerships that promoted them for brands.
The pattern? In the midst and wake of each of these major economic crises and the resulting belt-tightening, we see an increased reliance on partnerships.
Partnerships bring cash in the door
In the current crisis, businesses and marketing teams are looking for ways to bring in revenue yet cut costs. At the same time, consumers need extra motivation to spend. Partnerships solve both problems, providing a cost-effective, performance-based channel and the ability to incentivise buying with deals and loyalty perks.
But those benefits are just part of the story. The characteristics of this particular crisis have revealed additional benefits to partnerships. Choppy demand — soaring for some goods and flatlined for others — and physical store closures have created unexpected opportunities for partners to deliver value to brands. Here are just a few.
Three ways partnerships offer pandemic relief
- A path to cash via inventory liquidation. Ageing inventory stuck in closed stores is money left on the table. Deal-oriented partners can be very effective at moving shut-in inventory out of your stores. Even if you are selling at or below cost, cash is cash, and last-seasons SKUs won’t move any faster next year. Call on those discount sites that specialize in moving inventory fast to consumers looking for bargains. Your CFO will thank you.
- An antidote for Amazon. Using your content and deal-based partners to promote coded discounts, free shipping, flash sales, limited-time offers, and double points is a great way to encourage buying. What’s more, ramping up coupons and deals in high-demand categories offers a rare opportunity for online retailers to take market share and customer loyalty away from Amazon, which is not known for offering the discounting or incentives consumers want right now.
- A showroom for hot goods. Partners can help you elevate the categories consumers need most — categories you may not be known for. Move those products to the front of your site even if they are not your usual sweet spot, and proactively notify your partners so they can promote them. If inventory is low, use your partners to start first-come, first-serve waiting lists (you may not have to pay commission until you ship).
There’s no denying that it’s a tough time for retail in Australia but creating smart partnerships to drive incremental revenue and reach new audiences is a low risk and (potentially) high return strategy that has helped retailers through previous economic strife.
Todd Crawford is co-founder at Impact