It’s a sad fact, but a fact nonetheless, that inflation has once again increased. A combination of global events and questionable financial plans has resulted in many of us trying to see how far we can stretch a metal coin. The affiliate marketing industry is no stranger to this. In the marketing world, when the customer is affected, the industry is affected.
Where can we see this most? How has inflation affected affiliate marketing and how should we readjust to adapt?
Shifting customer habits
The most obvious change the marketing industry as a whole is likely to see is a change in customer behaviour. However, this might not manifest in the way that you are expecting. There are reports of a lot of surprising changes in behaviour. People still have to spend money, but perhaps they are shifting loyalty to discount retailers. They might not cease buying non-essential items, but they might think more before buying them and looking for value for money.
eCommerce marketers selling handbags, for example, might want to play up the longevity of the material, rather than the designer label. This is a particularly useful thing to remember on the run-up to Christmas where gift-giving can be about what you want rather than what you need.
Increased cost of doing business
Businesses in every sector are seeing that the costs of running a business is going up. Even on the most basic of things: rent, heating, Wi-Fi, etc. Affiliate marketers in particular will see inflation driving up the price of web hosting, software, advertising, etc. According to Labor Department data, prices for all types of web hosting services in the US increased by around 13% from June 2021 to June 2022.
Pressure on affiliate commissions
However, as more brands deal with lower profit margins, it might be instinctive to lower affiliate commissions. Affiliate partners are not likely to like this and might push back since it would be harder for them to maintain their income levels.
Shifting to value for money
As mentioned, customers are likely to be looking for more value in their buying habits, and that isn’t just limited to buying a quality product. Affiliate marketers can better promote value with promotions, discounts, coupons, sales, cashback offers, and more.
Additionally, you might see falling numbers on big-ticket purchases: cars, TVs, home renovations, and travelling abroad will all dip.
Opportunities in some sectors
It’s not all bad. Some sectors will see increased interest during harder times. For example, we mentioned travelling going down, but travel deals will likely go up. There might also be a rise in budget products and second-hand goods.
Additionally, in tougher times you’ll find customers would rather take up DIY, which is an angle a lot of products can fill. This can apply to housework, sure, but also beauty services, hospitality, vehicle repairs, travel, etc. Staycations really caught on once lockdowns lifted but the airports were still closed, and teens have been dying hair themselves for decades because a box dye is £5-10 but a salon visit will set you back much more. You can present your items or services as a means to recreate a luxury experience at home.
The aim of the game is to work smarter, rather than better since no one can afford a “better” product right now. Customers are becoming more critical of what they buy, therefore marketers should appeal to new needs and scrutiny.