Social media has moved up the ranks to become an important tool for engaging and attracting new customers, even though paid search and email marketing are still on the top of retailers’ list of effective customer acquisition channels, according to the State of Retailing Online 2015 survey.
The survey, which was conducted by Shop.org, Forrester Research Inc. and Bizrate Insights, found that 25% of retailers cite Facebook as the top acquisition platform.
Retailers use social media to complement search, email and affiliate marketing tactics. In fact, 58% are increasing their year-over-year spend on social media marketing, second only to the number of companies who are spending more on search engine marketing, which was 63%.
“It’s 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.”
For paid social media, 50% of retailers 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 at 29% with retailers saying they will spend more on paid options for the video website followed by Pinterest at 27%, Twitter at 22%, Instagram at 20% and Snapchat at 6%.
With more and more companies looking to grow their ecommerce business and diversify their traffic drivers beyond search, retailers are also exploring online retail marketplaces. 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.
Retailers surveyed allocate 16% of their digital marketing budgets to online marketplace initiatives and operations, second only to search engine marketing at 33% which is at the same level as search engine optimization and ahead of email marketing at 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.”
With site merchandising, 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. Sixty-three percent of retailers surveyed increased their online merchandising budgets this year compared to last year, while 49% also increased their online merchandising staffing.