The No. 1 customer acquisition tactic is paid search programs, according to the 2014
Shop.org/ForresterResearch State of Retailing Online study.
The study, which surveyed 81 retailers in May and June 2014, found that search engine marketing is praised by 85% of retailers as one of the most effective customer acquisition tactics. In fact, retailers spend more of their interactive marketing budgets on paid search programs than on any other tactic, and four out of five retailers surveyed are also spending more on pay-for-performance search placement this year than last.
“While much of the ground work has been laid for perfecting paid search and how well it works for retailers’ customer acquisition goals, the fact of the matter is that retailers still have plenty of opportunities to learn more about their customers’ needs,” Shop.org Executive Director Vicki Cantrell said in a release. “As customer touch points expand, retailers continue to investigate other ways to diversify their marketing spend, including budgeting for increased spend for text advertisements, display ads, social, and attribution models.”
To acquire new customers, retailers also cited:
· Organic traffic
· Affiliate programs
· Remarketing/retargeting of shoppers in online ads
Display ads are experiencing a resurgence, the study shows, specifically remarketing, retargeting, and behavioral targeting ranked among retailers’ leading customer acquisition tactics. Display ads now collectively rank as the second-highest area of marketing spend behind paid search.
While online retailers report increased marketing spend dedicated to mobile in 2014, the study shows that the focus remains on fundamentals such as email. Despite email’s reputation as a fading form of communication, particularly among younger shoppers, it is proving its staying power. The survey found that on average, 42% of retailers’ email opens now happen on smartphones, up from 28% in 2013, while email open rates on tablets grew from 16%-17%.
Social media is also receiving increased attention from retailers, according to the study.
While Facebook may not be the direct money-maker retailers originally hoped for, it is proving valuable for customer engagement. According to the survey, 62% of retailers surveyed plan to spend more on Facebook interactive marketing efforts this year than last. What’s more, nearly half of retailers surveyed say they will dedicate more spend to social sites such as Instagram, YouTube, Pinterest, and Twitter in the coming year.
“Thanks to the effectiveness and renewed budget focus on display advertising, Facebook cannot be counted out from a retail advertising stand point,” Forrester Vice President and Principal Analyst Sucharita Mulpuru said. “People think of Facebook as a social network, but in reality it’s another medium for personalized display advertising–likely explaining why Facebook has surfaced so high in planned budget spend this year.”
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 82 companies. Industries surveyed included apparel, footwear, accessories, general merchandise, home furnishings, and personal care.