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An Exclusive Report From The Editors Of Internet Retailer
THE NEXT DIGITAL MARKETING WAVE
Breaking News!
Internet Retailer has issued a new industry report covering their predictions for retailers’ and brands’ online spending in 2016. Below, I’ve highlighted some of the points and graphs that are relevant and vitally important to all online retailers, from solopreneurs to major brands.
According to Zak Stambor, Editor of Internet Retailer, “In (our) first-ever digital marketing survey, the results of which are included in this special report, we find that many retailers are boosting their digital ad spending, and they’re spreading those dollars around to a variety of channels. As they do so, they’re also looking for ways to make their messages more relevant to shoppers.”
Image Source: THE NEXT DIGITAL MARKETING WAVE, Internet Retailer
Ads Get Personal
“While digital ad budgets are growing,” Zak says, “marketers still must spend wisely. Increasingly that means tailoring just about every digital marketing campaign to individual shoppers.”
For example, men’s apparel retailer Bonobos Inc. sends a lot of emails, between one and five acquisition and retention messages a day. Email is their main thing. And it is clearly targeted based on segmented email lists.
The segments are based on the likelihood of purchasing specific products, colors, styles, or sizes.
In 2014, the company ran a test to determine how effective its targeting strategy really was in increasing sales. It sent the same email to two different lists – one email list that was determined to be inclined to buy an item promoted through the email, and one email list that was a completely random cross-section of all undifferentiated email addresses. The result? The segmented list was four times more likely to purchase than the random list.
As a strategy to increase revenues, targeting and retargeting are the focus of Bonobos’ online ad spend, consistent with other online retailers.
Digital Ad Spending
“And it isn’t just email where retailers are spending more; 66% of respondents increased their overall budgets this year— including 24% of all respondents who boosted their spending more than 20%. That growth continues an ongoing trend. U.S. retailers’ digital ad spending jumped 14.4% last year—from $9.574 billion in 2013 to $10.957 billion,” according to eMarketer Inc., which expects spending to rise another 16.8% this year to $12.802 billion.
Image Source: THE NEXT DIGITAL MARKETING WAVE, Internet Retailer
The Power of Digital Referrals
According to a recent Nielsen Co. survey, 92% of respondents said they trusted referrals from people they know, and that same study found that shoppers are four times more likely to buy a product when a friend has referred it.
Additionally, the lifetime value of a customer who has been referred by a friend is 16% higher than that of the average customer, according to a University of Pennsylvania Wharton School of Business report. So why aren’t more retailers deploying customer referral programs? “Retailers have an awareness of referral programs, but there is a lack of clarity around the potential impact of referral on their business,” says Chris Duskin, vice president of marketing at Extole, a referral marketing firm. “Many retailers aren’t yet dialed into the fact that there is a marketing platform for customer referral programs that has the same power that marketing platforms have for search and email, for example. Refer-a-friend isn’t merely a widget or a homegrown effort anymore.”
As more retailers begin to implement digital marketing campaigns that take an integrated multichannel approach, Duskin says they should expand those efforts to include customer referral programs. “Today, many retail marketers are utilizing vast amounts of data to very specifically target their customers,” he says. “That’s where the opportunity lies.”
“To be successful in referral, retailers need to get started quickly, take advantage of the immediate opportunity, and expand to grow the program beyond what most people even realize is possible,” Duskin says. “They need to shift to a ‘customer journey’ way of thinking and fully understand the much more complex relationship they have with their customers today. It’s not as much a challenge as it is an opportunity.”
Image Source: THE NEXT DIGITAL MARKETING WAVE, Internet Retailer
Retargeting
Retargeting consumers across the web via display ads—which 27% of Forrester respondents listed as one of their five top customer acquisition channels—can be one way to stretch a budget because the consumers a retailer is targeting have already expressed interest in a brand’s products, says Courtney Lear Wallace, director of digital marketing and e-commerce at online-only apparel retailer Unique Vintage.
“There’s so much noise out there that you have to be relevant,” she says. “A message that’s based on something a shopper looked at can be incredibly effective.”
This post is courtesy of Internet Retailer and THE NEXT DIGITAL MARKETING WAVE.
For more resources, see the Free Management Library topic: Marketing and Social Media.
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ABOUT Lisa M. Chapman:
Lisa Chapman helps company leaders define, plan, and achieve their goals, both online and offline. After 25+ years as an entrepreneur, she is now a business and marketing consultant, business planning consultant, and social media consultant. Online, she works with clients to establish and enhance their online brand, attract their target market, engage them in meaningful social media conversations, and convert online traffic into revenues. Email: Lisa (at) Lisa Chapman (dot) com. Her book, The WebPowered Entrepreneur – A Step-by-Step Guide is available at:
