As an affiliate, I have always been interested in patterns of behaviour and influences upon online consumers (well, I’d be mad if I wasn’t!). A couple of things have happened in the last month which have gotten me to thinking about how vunerable affiliate marketing business owners are to the influences affecting offline retail trends.
There’s no doubt that this time last year sales were affected in affiliate-land as our football mad nation ground to a halt with millions of football fans being too frightened to be any more than ten paces from a TV on any given day.
Last month, the UK was affected by terrible flooding during a month which should have been the start of our summer. Many people were flooded out of their homes, and millions of pounds worth of damage was done in what turned out to be the wettest June since records began.
It’s been reported that the retail sector came out of the month of terrible weather largely unscathed with an overall increase in sales of over 5%. However the figures are generalised over the entire retail sector, and are based on growth against last year’s World Cup month of June. It’s also reported that offline retailers were often engaging in heavy discounting, and that some retailers struggled dreadfully during this month.
Retail areas which were most adversely affected were Clothing, Footwear, and DIY type goods (although I did speculate that dehumidifiers might see a surge in demand). On the other side of the retail see saw, homewares and other goods from department stores saw a surge in sales after people abandoned the unkind outdoors for a bit of indoor retail therapy to cheer themselves up.
So Did All This Affect The Affiliate Sector?
The graph below shows my own affiliate sales patterns during June. The actual daily sums involved are obscured, and the sectors making up the mainstay of my activity during June were lingerie, swimwear, gifts, cosmetics, skincare, and UK Holidays.
The blue line represents my profits after sales costs on a day to day basis, and the pink line is the average daily sales value up to the point it was plotted. i.e. on day ten of the month the point at which the pink line is plotted represents total sales for the month divided by ten. I’ve removed the information regarding my profit levels, y’all don’t need to know that 
As you can see, things were extremely unstable for the entire month of June and my average sales saw a steady decline after mid-month when the flooding happened. However, Father’s day was also in mid-June, so I have to assume that some of the peaks early in the month are attributable to that. I didn’t do any Father’s Day specific campaigns though, so I don’t think the peak early in the month (and therefore the decline in the latter part of the month) is entirely Father’s day based.
I’m not entirely sure that all of the decline is entirely attributable to the floods, other factors were quite clearly at play.
Will This Month’s UK Interest Rate Rise Affect Affiliate Sales?
Our recent interest rate rise is certainly designed to cool off our high spending ways, and with another one predicted to be on the way before the end of the year, there’s no doubt that a retail slowdown will result.
I’m not yet seeing any early effects of this in my campaigns for the sectors I mentioned above this month.
As you can see, I’m having a much more pleasant month as sales slope gently upward (UK holiday bookings are partly responsible) and huge peaks and troughs are not so evident.
Clearly, any effect on affiliates will depend on the sectors they are operating within. An interesting comment by SimonB (who works for a mortgage and loan lead broker) on this A4UForum Thread notes that “We’ve had our 2 biggest weeks ever in the past 2 weeks”. So it seems that debt consolidation affiliates are going to have a nice strong increase in business over the coming months! Not a negative in sight for them as people start to struggle to meet the costs of their monthly debt repayments.
We can also speculate that luxury items will see a decrease in sales online, but might people also turn increasingly to online retailers to get things at cheaper prices as the interest rates squeeze disposable incomes? It’s also likely that sectors targeting consumers who buy essentials such as pharmacy and other medical items online will remain steady.
Although I’ve not been able to find any figures to back up the effect of interest rate changes on online spending, it does seem clear that only certain online sectors would be affected if there was to be a retail spending slowdown. The good news for us affiliates, is that we have the ability to diversify the sectors we are promoting to offset any alteration in income.
In light of the interest rate hikes that have happened since I left the UK, this is something that I am certainly going to think about now rather than waiting for parts of my income to potentially drop through the floor!
