When It Comes To Paid Social Media, Facebook Leads The Way

Retailers continue to rely on paid search and email marketing channels, but mobile marketing and social media are continuing to increase in popularity as a way for businesses to grow their customer acquisition, according to a new study.

The study, entitled “The State of Retailing Online 2016: Marketing and Merchandising,” by the National Retail Federation and Forrester, a research and advisory firm for the retail industry, polled 240 companies from June through July.

Email marketing is the number one strategy that retailers are investing in, with 94 percent of all those surveyed saying it was part of their company’s marketing strategy, while social media was second at 92 percent.

More and more retailers seem to be realizing the value of incorporating social media into their marketing campaigns, as it is increasingly proving to be a good revenue driver at a low cost.

Retailers online marketing budgets appear as though they will rise in 2016 as well, as 55 percent of retailers surveyed said they planned to increase their online advertising budgets in 2016, while another 44 percent said they planned to increase their web merchandising staff.

“Although email and SEO are tools frequently used by retail marketers, it was not a surprise to see that social media is gaining traction with retailers as they continue to further connect and engage with consumers,” NRF Senior Vice President and Shop.org Executive Director Vicki Cantrell said in a statement. “Retailers are not only increasing their social media budgets, but they are looking at new ways to update their online content and stay on top of new trends to continue to grow their customer acquisition online and in-store.”

For paid social media, Facebook leads the way with retailers, with 68 percent responding that their company uses the social media platform and that those efforts have led to increased conversion; Instagram came in second in the survey with 40 percent of retailers surveyed responding that their company uses it in 2016.

Due to that figure, 71 percent of retailers said they planned to boost their spending on Facebook this year, compared to 37 percent who planned to increase their Instagram spending, 29 percent who planned to up their Pinterest spend, 21 percent planned an increase in YouTube spend and 10 percent and 6 percent said they planned to increase their Twitter and Snapchat spending, respectively.

“All of a sudden, retailers are finding that paid social media is leading to actual sales,” according to Fiona Swerdlow, a vice president and research director at Forrester. “While retailers have been thinking about, testing and experimenting with social media to engage with customers, for the most part, those efforts didn’t pan out.”

Retailers are also increasing their mobile marketing efforts, as 65 percent of those surveyed said they planned to spend more in 2016 on mobile marketing compared to 2015, with ads geared toward smartphones leading the increase. Of those retailers surveyed, 45 percent said that their company’s email subscribers open ads on their smartphones the most, compared to 41 percent who open them on their desktop and 14 percent who open them on their tablets.

Retailers also seem to be stepping up their investment in premium digital content to help consumers make buying decisions, as 63 percent said they planned to invest in marketing campaigns centered around professionally produced imagery, peer reviews and other online-centered content.

“Customer-obsessed retailers are wisely investing this year to revamp their checkout process, as well as the overall site design — across desktop, smartphone and tablet devices,” according to Swerdlow. “Many also are upping the ante on developing rich content to meet their customers’ needs, even if creating, managing and keeping that content fresh isn’t always easy.”