While paid search and email marketing still top retailers’ list of effective customer acquisition channels, social media has moved up the ranks to become an important tool for engaging with and attracting new customers. According to the State Of Retailing Online 2015, conducted by Shop.org, Forrester Research Inc. (Nasdaq: FORR), and Bizrate Insights, 25% of retailers surveyed cite Facebook as a top acquisition platform.
Underscoring retailers’ heightened use of social to complement search, email, and affiliate marketing tactics, 58% are increasing their year-over-year spend on social media marketing, second only to the number of companies that are spending more on search engine marketing (63%).
“It was not a surprise to see that search and email marketing tools are still powerful, but to further engage consumers, retailers understand that using complementary marketing channels, including the use of social media, makes a tremendous difference in reaching new markets and diversifying their outreach,” said NRF Senior Vice President and Shop.org Executive Director Vicki Cantrell. “With so much marketing ‘noise’ and competition these days, retailers are testing and investing in a variety of acquisition media to appeal to their customers and to make the most effective use of their tight marketing budgets.”
When it comes to paid social media specifically, half (50%) of retailers surveyed say they are spending more this year than last year on paid Facebook options, such as promoted posts and paid ads; YouTube came in second with 29% saying they will spend more on paid options for the video website, followed by Pinterest (27%), Twitter (22%), Instagram (20%), and Snapchat (6%).
Online Marketplaces Rank Fifth In Customer Acquisition Channels
As more companies look for ways to grow their eCommerce business and diversify their traffic drivers beyond search, retailers are also exploring online retail marketplaces — whereby a retailer sells goods via another retailer’s site — to acquire new customers. The study found that merchants surveyed rank online marketplaces in fifth place for effectiveness among customer acquisition tools, and 32% are spending more on this marketing tactic this year than last. On average, retailers surveyed allocate 16% of their digital marketing budgets to online marketplace initiatives and operations, second only to search engine marketing (33%), which is on par with search engine optimization, and just ahead of email marketing (14%).
“From Wal-Mart and Alibaba, to Sears and Macy’s — the collective world of eCommerce has integrated the use of marketplaces into their business and benefited from the increased customer traffic,” said Forrester Vice President and Principal Analyst Sucharita Mulpuru. “For many retailers, using marketplaces gives them a new way to compete with Amazon — even if that means selling their products on Amazon itself.”
Site Merchandising Efforts Focus On The Basics
Site merchandising connects all the dots for retailers looking to improve their customers’ online shopping experience. The study found that this year retailers are prioritizing site redesigns for smartphone (55%), tablet (46%), and desktop (41%) and are also enhancing product pages and improving the checkout process across devices, among numerous other improvements. To that end, 63% of retailers surveyed increased their online merchandising budgets this year compared to last, while half (49%) also increased their online merchandising staffing.
About The State Of Retailing Online Report
The State Of Retailing Online research series, which provides eBusiness & Channel Strategy Professionals with annual industry benchmarks of marketing and business investment and activities, surveyed 240 companies in May and June 2015. Industries surveyed included apparel, footwear, general merchandise, home furnishings, and personal care.
About Bizrate Insights
With over 27 million surveys collected annually from over 6,000 retailers worldwide, Bizrate Insights is one of the largest sources of verified customer-generated seller ratings and reviews, helping both retailers and consumers make informed decisions. Bizrate Insights’ solutions cover online and mobile visitors, online and mobile buyers, as well as retail store buyers. Our core solutions are free, allowing retailers of all sizes to build best-in-class customer experiences, gain competitive intelligence, and attract more qualified traffic from top search engines.
Shop.org, a division of the National Retail Federation, is the world’s leading community for digital retail, offering thought leadership through original research and gold standard events. The community is made up of exclusive networking groups and committees that lead the global conversation surrounding innovative e-commerce trends and digital retail. Shop.org members include some of the world’s largest most respected retail, technology, research, and consulting companies. www.shop.org