• by Ray Schultz , Columnist, July 23, 2020

Retail privacy compliance has suffered during the pandemic, judging by "The Big Pivot: How Traditional and Digital Retailers Re-prioritized Marketing Investments in the Wake of Covid-19," a study by CommerceNext, sponsored by Exponea. 

It couldn’t come at a worse time, given that the California Privacy Protection Act (CCPA) has just gone into effect and GDPR is in full force throughout Europe.  

In June, slightly more than 30% of  brands said they plan to invest in security/privacy technology, compared with 50% in January. And fewer than 30% in the digital space planned to.

Moreover, almost 50% are investing the minimal amount to be compliant, compared with almost 40% in January, and 35% are spending a moderate sum, down slightly from six months before. 

Worse, roughly 15% are “embracing privacy,” declining  from around 25% in January. 

To put this in context, over 40% of traditional retailers say their total marketing budgets have decreased significantly, versus only 15% of digital marketers. And a mere 18% of digital brands are posting significant increases, along with roughly 12% of traditional firms.

In line with that, spending has declined on customer data platforms, alternative payments, advanced attribution and measurement and programmatic TV.

Yet around 55% plan to spend on messaging/SMS, up from 52% in January. And budgets are going up for augmented/virtual reality for online stores and visual search. 

This is happening as companies switch their focus more to retention and less on acquisition. 

Fewer than 20% expect to focus more on acquisition, down from over 30% in January. And almost 40% foresee they'll concentrate more on retention, up from 32% in January. 

But that should change as we approach the holiday season. 

Over 60% plan to spend on acquisition, a little more than the number for January. At the same, there has been a roughly 5% decline in those investing in retention/loyalty marketing for holiday—to 60%.  

Paid search appears to be the top acquisition tactic among both digital-first and traditional firms, although paid social is tied with search on the digital side. 

At the same time, there will be a cut in the anticipated spend on personalization—down to less than 35%, compared with almost 50% in January. 

The study concludes that “the overwhelming takeaway is, forget what you [think] should happen in 2020. At least for now.” 

The company polled 111 senior executives as U.S. based retail-and DTC brands, and 75 in June. In addition, it polled attendees in a series of live webinars.