Digital Commerce 360’s ninth-annual digital marketing survey focused on the challenges, tactics, and overall marketing trends of retailers across 25 various categories. This extensive overview gives a deep dive into the different aspects of their respective marketing strategies and budget allocations.
Evolution of Digital Marketing Budgets
The budget allocated to digital marketing varies widely amongst the retailers surveyed. In 2023, 59% of them increased their digital marketing budgets, whereas 27% kept it unchanged and only 14% decreased. A comprehensive breakdown of the increase reveals:
- 14% of retailers projected their digital marketing budget to grow by 21% or higher,
- 33% projected a 10-20% increase,
- The remaining 12% projected a limited budget increase of just 1-5%.
Marketing Tactics Employed by Retailers
Investigating the digital marketing strategies employed by retailers reveals that email, content, and search marketing techniques are a common preference, with six out of ten retailers adopting them. Besides, at least half of the surveyed retailers leveraged social media platforms such as Facebook (62%), Instagram (52%), YouTube (52%), and TikTok (30%). However, other remarkable adverting tactics such as mobile ads (44%), Amazon ads (41%), and marketplace ads (36%) also made the list.
The Efficiency of Marketing Tactics
While the budget allocation is crucial, the most pivotal factor is the tactics’ effectiveness. Funnily enough, the top four tactics in line with budgets matched their effectiveness. They include email (61%), paid search (55%), search engine marketing (53%), and content marketing (49%). Other techniques like affiliate marketing (32%), Facebook (32%), Instagram (27%), and YouTube (24%) signal a substantial drop in their effectiveness.
Investment in Customer Acquisition
The spending habits in customer acquisition also provide interesting insights. A significant 42% of retailers spend more than half of their budget on customer acquisition, signifying that they believe new customers are worth the investment. However, only one in three companies spend 20% or less.
Social Media Marketing
Social media platforms play a vital role in retail marketing, with over half of retailers using social media advertising to increase sales and brand awareness. Despite this, the majority of online retailers only find Facebook and Instagram successful delivery of ROI, with YouTube and LinkedIn following closely.
The Complex Role of Influencers
The use and impact of influencers are constantly under scrutiny. Although they potentially serve multiple roles, the effectiveness of influencers is not yet confirmed by many retailers. Many of them cited time investment to understand the potential of influencers, difficulty in finding a suitable fit, and cost as the main areas of concern.
Analyzing and Adopting Technology in Marketing
Analytics and data visualization tools lead the pack when it comes to platforms used by retailers to support their marketing efforts. Interestingly, 58% of retailers also indicated plans to incorporate AI in their marketing, albeit with only 15% satisfied with their current use of AI.
Marketing Challenges
Profitability and costs are the predominant obstacles retailers encounter from a marketing perspective. Other challenges include identifying the right digital tactics, figuring out the direct impact of marketing on conversions, and analyzing data effectively.
Conclusion
The results of the annual survey suggest a robust growth in digital marketing budgets, a move that incorporates diverse techniques across email, paid search and content marketing, amongst others. Social media platforms and influencers are increasingly featuring in strategies, but with mixed results. Retailers will need to continue adapting and optimizing their strategies in 2023 and beyond for a profitable marketing future.
Tags: #DigitalMarketing, #RetailMarketing, #2023Trends, #MarketingBudgets