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., and Bizrate Insights, 25 percent of retailers surveyed cite Facebook as a top acquisition platform.
Underscoring retailers’ heightened use of social media to complement search, email and affiliate marketing tactics, 58 percent are increasing year-over-year spend on social media marketing, second only to the number of companies that are spending more on search engine marketing (63 percent).
“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 VP 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 percent) 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 percent saying they will spend more on paid options for the video website, followed by Pinterest (27 percent), Twitter (22 percent), Instagram (20 percent) and Snapchat (6 percent).
Online marketplaces rank fifth in customer acquisition channels
As more companies look for ways to grow e-commerce 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 ranked online marketplaces in fifth place for effectiveness among customer acquisition tools. The survey also found 32 percent are spending more on this marketing tactic than they did last year. On average, retailers surveyed allocate 16 percent of their digital marketing budgets to online marketplace initiatives and operations, second only to search engine marketing (33 percent), which is on par with search engine optimization, and just ahead of email marketing (14 percent).
“From Wal-Mart and Alibaba, to Sears and Macy’s, the collective world of e-commerce 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 the customers online shopping experience. The study found retailers are prioritizing site redesigns for smartphone (55 percent), tablet (46 percent) and desktop (41 percent), while also enhancing product pages and improving the checkout process across devices, among numerous other improvements. To that end, 63 percent of retailers surveyed increased their online merchandising budgets this year compared to last, while half (49 percent) also increased online merchandising staffing.