Cover Story: Annual Trends Survey 2011
While Retail Online Integration readers are increasing their focus on e-commerce and social media marketing this year, mobile marketing/commerce won't be garnering the same attention, at least according to responses to this year's Annual Trends Survey.
For this year's survey, which, as in year's past, focused on cross-channel marketing and promotional integration, cross-channel challenges, and other retail marketing trends, we polled all Retail Online Integration and ROI Report subscribers in January. A total of 396 readers responded.
All About Our Readers
In terms of primary business classification, most readers consider themselves online merchants, with 31 percent of respondents claiming this. The next most popular business classification was brick-and-mortar retailer (24 percent), followed by "other" (20 percent), which primarily included service providers and consultants. Much like last year's findings, we learned that there are two main types of retail executives who read ROI: CEOs and high-level marketing execs. In fact, 48 percent of respondents are company CEOs and 22 percent are in some type of marketing position. Most respondents work at B-to-B/B-to-C hybrid firms (48 percent), followed by B-to-C firms (37 percent) and B-to-B firms (15 percent). The annual revenues for our respondents' companies generally fall into the "less than $1 million" and "$1 million to $4.9 million" range, with 45 percent in the former category, 17 percent in the latter.
E-Commerce Leads the Way
When it comes to the channels in which respondents market, e-commerce websites lead the pack. Eighty-one percent of respondents said they marketed via an e-commerce site last year. Other sales and marketing channels included brick-and-mortar stores (46 percent), print catalogs (40 percent), direct sales force (32 percent) and digital catalogs (26 percent). As for marketing spend across channels, 18 percent of respondents spend 90 percent or more of their marketing budget on e-commerce websites, making it the most popular channel in the "90 percent or more" group. Retail stores aren't far behind in terms of marketing budget spend, with 14 percent of respondents saying they spent 90 percent or more of their budget on the channel. Direct sales forces rounded out the top three, with 10 percent of respondents spending more than 90 percent of their marketing budget on the channel.
Websites, Email, Social Media:
The Promotional Leaders
When it comes to how respondents promote themselves, websites, email and social media were the leaders. The majority of respondents considered their own website as their main promotional channel (73 percent), followed by email (62 percent) and social media (43 percent).
Despite the growing popularity of social media as a promotional channel, only 51 percent of respondents said they have a set social media strategy in place. What's more, 19 percent cited social media as the top challenge their business will face in 2011. Of the 49 percent of respondents planning on hiring more staff this year, 42 percent said those hires will be in the social media marketing space.
Social media is also gaining ground in budget spend. A whopping 55 percent of respondents said they'll increase spending on social media this year, while 38 percent will spend the same amount and only 7 percent will decrease spending on the channel.
Seventy-one percent of respondents said the main objective of their social media efforts is customer engagement. Other objectives for the channel include using it to drive web traffic to their main website (59 percent); generate sales (53 percent); customer intelligence acquisition, including customer feedback and ratings and reviews (40 percent); customer service (39 percent); drive traffic to brick-and-mortar stores (28 percent); and a tool for segmenting and targeting (21 percent).
ROI readers have a bigger presence on Facebook than Twitter, with 84 percent on Facebook vs. 57 percent on Twitter. Forty-one percent of respondents said they have and use company blogs, 22 percent are on LinkedIn, the same percentage as YouTube, and 9 percent still use MySpace.
Truly the Year of Mobile?
How many times have you heard an industry "expert" say this is the year of mobile? It seems like the last three years have all been pegged with that title. But does the data bear out the claim? The answer is no, at least according to the cross-channel retailers who responded to our survey. Mobile has yet to obtain the widespread adoption many have predicted for the channel. That's not to say it won't happen, it just hasn't happened yet.
Nearly 95 percent of respondents didn't use mobile QR codes in 2010, and while that percentage is forecasted to lower to 75 percent this year, a full three-quarters of respondents won't make use of this "hot" technology. Granted, a good portion of respondents don't have a brick-and-mortar presence, which does skew the percentage higher to some degree, but the fact of the matter remains that mobile isn't playing a primary role in most retail businesses — at least for now.
Retailers' spending on mobile will rise in 2011 — specifically, respondents plan to increase their spending on mobile sites by 33 percent and on mobile applications by 28 percent — but the increase still lags spending growth in more traditional marketing channels such as website enhancements (61 percent), email (53 percent), search engine optimization/search engine marketing (47 percent), online display ads and targeted landing pages (both 39 percent), and affiliate marketing (36 percent). Even relative newcomer social media will see a bigger percentage of retailers' budgets — 55 percent of respondents said they'll increase their spending on the channel in 2011 — than mobile.
While not going all in with mobile compared to other marketing channels (e.g., social media), retailers won't be decreasing their spending on the medium, either. Only 8 percent of respondents said they'll decrease their spending on mobile applications in 2011, and 7 percent said they'll cut their budget for mobile websites this year. The majority of respondents are taking a wait-and-see approach when it comes to mobile marketing/commerce — at least when it comes to their money. Sixty-four percent said they'll spend the same on mobile applications in 2011 as they did in 2010, while 60 percent plan to spend the same amount on their mobile website this year vs. last year.
Not surprising to most, offline media, particularly print, will see the biggest decrease in marketers' budget spend. Twenty-one percent of respondents said they'll decrease their promotional spending on print ads in 2011, and another 20 percent plan to cut spending on their print catalog. Direct mail will see a 15 percent drop in promotional spending as well. In contrast, the online marketing channel forecasted to see the biggest decrease in promotional spending in 2011 is video, with just 10 percent of respondents planning to make cuts in this area.
Customer acquisition is the challenge most respondents are facing right now, according to the survey, with 53 percent citing difficulties in this area. Building customer loyalty was a distant second in this category, with 26 percent of respondents naming it as the top challenge they're facing right now. Other challenges included managing multiple marketing channels (17 percent) and website analysis (16 percent). But despite these challenges, perhaps the best news to come out of the survey was that 91 percent of respondents said they believe they'll meet their revenue expectations in 2011.