As the world winds down in the first quarter of 2023, the word “inflation” has become nearly impossible to ignore, and for good reason.
The rise in inflation began an upward trajectory in early 2021, with the UK CPIH reaching 8.8% at the time of writing. While there is no doubt that unrelated factors such as the conflict in Ukraine and Russia contributed to this monumental rise, affiliate marketing has been unique in its ability to directly capture consumer habits and trends over this two-year period. I am in a position of So what did we learn?
1. Consumers are conscious about their spending
According to Awin data, consumers spent more time shopping and less time converting throughout 2022. A direct comparison of the UK's CPIH and the conversion rate reveals a clear and conclusive trend. Retail conversion rates decreased as CPIH increased, especially in October 2022, when CIPH peaked at 9.6% and the number of conversions decreased sharply. Traffic shows that while consumers are still searching for products, they feel much less motivated to convert. To some extent, this trend was expected as consumers eased their disposable income and started comparing product values and prices.
2. Content is king
With consumer confidence at an all-time low, influencers and content creators have a huge responsibility to remain authentic and relatable to their audiences. While the year-on-year growth in performance in 2022/23 may be due to limited performance in 2021 (as a result of the pandemic), nano and micro influencers are now more active than ever. plays a major role in What makes the influencer publisher category unique is that it not only boasts a diverse portfolio of creators, but also consists of small, niche influencers with an audience base of highly engaged, authentic, and influential followers. I am. As a result, the share of influencer content on Awin's platform increased from 15.5% to 17% from 2021 to 2022, and is not slowing down in 2023.
3. Sustainability is being put on the back burner
Perhaps more than any other sector, the sector bearing the brunt of the decline in consumer spending is sustainability. Since the outbreak of the conflict between Ukraine and Russia, the performance of green eco brands has been on a downward trend, taking into account the rise in inflation. There is evidence to support that consumers intend to return to sustainable living once the cost of living crisis ends, but 48% of UK consumers currently do not intend to pay any of the increased costs associated with a sustainable lifestyle. He says he can't afford it. As a result, the emerging industry will temporarily slow down.
4. Brands are less likely to offer discounts
The value and importance of discounts will be called into question in 2023, as content creators and editorial affiliates eat into publishers' vertical share. With increasing supplier and production costs, the general trend suggests that brands are far less likely to discount across the board. In fact, Awin's data revealed that 2022 Cyber Week retail sales saw a 20% decrease in the number of discount codes or coupons redeemed compared to 2021. Retailer discounts may not seem like much, especially at critical times, but they will undoubtedly continue to be an important staple in marketers' repertoires as margins recover and discounts and promotions come into play. Masu.
5. Affiliates remain strong even in volatile markets
While the cost of living crisis has undoubtedly created new challenges for marketers, affiliate marketing remains a driver of growth. A recent UK study comprising all major affiliate networks revealed how channels are used and valued. Considering the incredibly high ROI the channel achieves compared to other forms of digital marketing, it's no surprise that brands expect affiliate ad spend to increase significantly through 2023. . Channel transparency and a low-risk pay-for-performance model enable marketers to make clear and decisive spending decisions, especially at a time when everyone's marketing budgets are under increased scrutiny.
6. Technology that will transform the affiliate space
The channel has seen a proliferation of technology partners. Innovative and pioneering verticals will drive growth throughout the cost of living crisis. In 2022 alone, Intent.ly, Envolve, Uniqodo, Upsellit, and Revlifter generated nearly 1.5 million in sales for him across his Awin platform, with sales increasing +60% year over year. In some ways, the current economic crisis is the perfect storm to leverage these partners. Improve the online consumer experience by delivering personalized experiences, driving on-site interactions, increasing conversions, and keeping his ROI high with a low-risk performance model. Considering these factors, it's no surprise that technology is transforming the affiliate field.
Survive 2023 as a marketer
Unprecedented challenges will continue in 2023, and the cost of living crisis is unlikely to ease any time soon. Trends that emerged last year could continue into his 2024. But comparisons to the 2008 economic recession are common, and rightly so: The world has changed dramatically. Marketing is in a new state of flux. Affiliate marketing continues to diversify and strengthen its portfolio of partners to weather the waves of inflation.
Written by Alfie Staples, Global Insights Manager