Beauty Store Business magazine - January, 2020

One-Quarter of Online Retailers Say Facebook Among Top New Customer Acquisition Marketing Tactics

While paid search and email marketing both 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"—which includes personal care among its industries surveyed and was conducted by Shop.org, Forrester Research and Bizrate Insights—25% of retailers surveyed cite Facebook as a top acquisition platform. Shop.org is a division of the National Retail Federation.

Underscoring retailers’ heightened use of social to complement search, email and affiliate marketing tactics, 58% are increasing their year-over-year spends on social-media marketing—second only to the number of companies that are spending more on search engine marketing (63%).

“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 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.”

When it comes to paid social media specifically, half of retailers surveyed say they're spending more this year than last year on paid Facebook options such as promoted posts and paid ads; YouTube came in second with 29% saying they will spend more on paid options for the video website; followed by Pinterest (27%), Twitter (22%), Instagram (20%) and Snapchat (6%).

Online marketplaces rank fifth in customer acquisition channels. As more companies look for ways to grow their ecommerce businesses and diversify their traffic drivers beyond search, retailers are also exploring online retail marketplaces—where a retailer sells goods via another retailer’s site—to acquire new customers. The study found that 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. On average, retailers surveyed allocate 16% of their digital marketing budgets to online marketplace initiatives and operations—second only to search engine marketing (33%), which is on par with search engine optimization, and just ahead of email marketing (14%).

Forrester vice president and principal analyst Sucharita Mulpuru states, “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. 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 their customers’ online shopping experience. The study found that this year retailers are prioritizing site redesigns for smartphones (55%), tablets (46%) and desktops (41%), and are also enhancing product pages and improving the check-out process across devices, among numerous other improvements. To that end, 63% of retailers surveyed increased their online merchandising budgets this year compared to last, while 49% also increased their online merchandising staffing.

[Image courtesy of Shop.org]