Read This Before You Restart Your Ad Spend

After months of sheltering at home – and retail sales in the toilet – Americans are ready to shop.

Retail sales in the United States were up nearly 18% in May after record lows in March and April, according to the US Census Bureau’s most recent monthly retail trade report, released on Tuesday.

And hey, it’s encouraging news for the economic recovery. But quarter-over-quarter gains don’t tell the whole story.

Based on GroupM’s analysis of the US census data, overall May retail sales were down 7.7% on a year-over-year basis. The food service category was down 39% YoY. Apparel fell by 63% from May of last year.

Those numbers are a dose of reality as the economy starts to stutter back open. Although businesses are eager to rev up their ad spending and drum up demand, there’s a lot of preliminary work they’ve got to do first to make consumers feel comfortable with new precautions, procedures and protocols.

“People are also emerging and looking for guidance,” said Bre Rossetti, chief strategy officer at Havas Media in Boston. “Brands must consider how they address safety, as well as how to guide their customers and instill a sense of trust.”

Here’s how three hard-hit verticals – retailers, restaurants and the travel industry – are accommodating to the (please forgive me) new normal.

Retail

Apparel retailers, particularly the brick-and-mortar folks, were heavily impacted during the pandemic, a period of human history when it became semi-acceptable to attend virtual business meetings in unwashed T-shirts and athleisure wear came to feel like dressing up.

And now, as part of the reopening, these retailers must contend with confounding questions that never previously crossed their minds, such as: Do we let customers handle clothing without gloves? How do you allow browsing but also enforce social distancing? Do we let people try stuff on? Do we have to put returned items in quarantine? Do we need to close a store if a customer comes in who seems obviously ill, and, if so, for how long? Is our supply chain ready? Do we need to set up digital or contactless experiences?

“Many of our retailer clients are seeing dimensions of complexity they’ve never encountered before,” said Craig Atkinson, chief client officer at performance agency Tinuiti.

Retailers, though, feel a sense of urgency.

Many are sitting on heaps of unsold inventory that accumulated during the second half of Q1 and the first half of Q2, and most large retailers had already made their Q3 and Q4 inventory commitments when COVID-19 struck. Now they’re highly motivated to unload all this stuff. Macy’s alone needs roughly 27 million square feet of warehouse – the equivalent of 438 football fields – to house its unsold merchandise, according to retail data management company PreciseTarget.

The glut leads to a complex logistical and moral challenge. Big sales and discounts have the potential to attract crowds, but, in most states, in-store retail is resuming at limited capacity, at least for now. In New Jersey, the max capacity is 50%, while in Maine, capacity is set at five customers per 1,000 square feet. In California, there aren’t capacity limits as long as the store follows certain safety protocols.

But even though it’s not yet time for the hard sell, compliance can’t be the only component in messaging right now either. That’s because it’ll only “contribute to the next round of COVID fatigue,” said Scott MacLeod, head of planning at indie shop The VIA Agency.

“We use experience planning to clearly choreograph messages and media in-market,” MacLeod said. “This lets us weave essential education content into a brand’s unique point of view so it supports their competitive advantage, instead of taking center stage.”

Restaurants

Eating establishments have also been forced to radically alter their operations.

The pandemic accelerated ordering and curbside pickup mightily and served as a lifeline when indoor dining was no longer allowed. But as indoor dining is phased back in across the nation, restaurants are navigating their own rubicons of complexity.

At a bare minimum, the National Restaurant Association recommends food safety training for anyone who handles food; the availability of a mobile ordering app and contactless payment; the ability to communicate with diners by text so as to minimize contact; social distancing between tables; employee health monitoring; a rigorous sanitizing protocol, including regularly checking and cleaning restrooms based on frequency of use; that servers and other employees wear a face covering; and that there’s a manager on site at all times who has an up-to-date food safety certification.

Despite these precautions, however, some restaurants are having to close down again as quickly as they opened up. In mid-June, a number of restaurants in Dallas shut down temporarily, despite operating at limited capacity, after employees contracted COVID-19. The same was true in Arizona, where cases are on the rise faster now than in any other state.

Driving demand in this environment is tricky. The goal at this point is to make the experience as low stress and convenient as possible, especially if consumers are hesitant, said Wil Danielson, acting head of revenue and client success at Nexstar Digital.

“Large crowds are generally considered bad for business right now,” he said.

Travel

What’s it going to take to get people back in the air? Until there’s a vaccine, the airline business is going to be pretty anemic, and then likely even after, as companies cut down on business travel.

Digital travel sales in the United States are expected to drop by 44.7% this year, with total sales down to $115 billion from $208 billion in 2019, according to eMarketer. Although eMarketer forecasts 21% growth next year, assuming there’s a vaccine, digital travel sales probably won’t reach pre-coronavirus sales until 2022.

In the interim, airlines have a hell of a lot of work to do.

Amobee Chief Strategy Officer Philip Smolin, previously a frequent business traveler, recently received a number of surveys from his airline with questions about his thoughts on the availability of hand sanitizer, food service and masks for passengers and crew.

“But they didn’t ask me about the single thing that’s most important to me that I wanted to be educated about – ventilation and recycled air – and I had to share my thoughts in an open comments field,” Smolin said.

The fact is, a lot of people don’t feel safe flying commercially, let alone staying in a hotel, regardless of intensified cleaning procedures, said Janét Aizenstros, CEO and chairwoman of consultancy Ahava Digital. There are too many unknowns, and a lot of people aren’t going to take the risk.

From a marketing standpoint, risk tolerance depends on the audience. Region, income level and political alignment are all variables.

“Some people are going to get excited about cheap deals, while others that aren’t driven as much by price, like business travelers, will need very different messaging,” Smolin said. “The one thing you can bet on is that it won’t be a one-size-fits-all media strategy.”

And that’s why brands need “a high degree of flexibility” when thinking about communicating with consumers, said Jed Meyer, managing director for North America at Ebiquity.

“Given the rapidly changing state of health, economics and the civic dialogue on racism,” Meyer said, “marketers should shift to a ‘test and learn’ mindset in evaluating their go-to-market techniques, so they can adapt their communications strategy as warranted.”

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