How did Black Friday go for Temu and Shein?

With the start of the holiday shopping season and Black Friday, the online marketing landscape experienced significant shifts. Giants like Temu and Shein dominated digital advertising, causing a rapid rise in costs for competitors striving to maintain visibility in search results. This phenomenon forced traditional retailers to grapple with increasing marketing expenses and challenges in calculating profitability.

The Intensifying Keyword Wars

Search engines remained a crucial starting point for shoppers seeking discounts, especially during Black Friday. Retailers competed for visibility by bidding on popular keywords. This competition determined the cost per click (CPC) for search ads. The higher the demand for a keyword, the higher the CPC, and that year, bids reached unprecedented levels.

According to Semrush, Temu and Shein aggressively targeted competitor keywords in the U.S. For instance, Temu bid on phrases like “Walmart Black Friday deals” and “Kohls Black Friday,” while Shein focused on terms like “Zara jeans” and “Mango dresses.” Even general keywords such as “cheap clothes online” experienced significant price increases. For example, CPC for “Walmart clothes” rose 16-fold between August 2022 and August 2024.

Impact on Retailers

“It was tough,” commented Eric Lottier, an e-commerce expert from AlixPartners. With the rapid increase in CPC, the return on marketing investment declined, making certain campaigns unprofitable for many retailers. Considering that paid search advertising could generate 15% to 30% or more of online sales—while accounting for up to half of the marketing budget—such cost increases caused serious concerns.

Aggressive Strategies from Shein and Temu

Although bidding on competitor keywords wasn’t new, the scale and aggressiveness of Temu’s and Shein’s strategies stood out. Olga Andrienko, Vice President of Brand Marketing at Semrush, noted that these fast-fashion giants were fundamentally altering search marketing dynamics, outpacing traditional retailers.

Temu defended its practices, claiming that any inclusion of brand names in campaigns was unintentional and caused by automated processes. The company emphasized its commitment to fair competition and promptly correcting errors. Shein has yet to comment on the situation.

Diversifying Marketing Strategies

As CPCs rose, many retailers reconsidered their reliance on paid search advertising. Erin Brooks, Head of Retail Practice at Alvarez & Marsal, highlighted the growing shift to alternative channels, such as social media platforms TikTok and Facebook, influencer collaborations, and traditional advertising. “Brands were focusing on attracting valuable, loyal customers rather than those purely discount-driven,” Brooks explained.

For example, British fast-fashion retailer Asos recently launched a loyalty program and intensified efforts toward emotional engagement through cinematic advertisements and influencer partnerships. Dan Elton, Customer Service Director at Asos, stressed the importance of balancing performance marketing with brand-building initiatives.

Key Takeaways for Marketers

• Prepare for higher costs: Given the rising competition, budget planning for paid search ads requires a meticulous approach to ensure profitability.
• Explore alternative channels: Diversification into social media, influencer collaborations, and loyalty programs can help offset rising CPCs.
• Focus on valuable customers: Attract and retain customers who align with your brand values, not just those looking for discounts.
• Monitor competitor strategies: Continuously track keyword bidding trends to anticipate cost changes and adjust campaigns accordingly.

The keyword wars during Black Friday highlighted the ever-changing challenges of digital marketing. For retailers, flexibility and adaptation to these shifts will be critical to success.

This article available in Ukrainian.