NRF/Forrester survey says Facebook leads digital marketing spend for retailers

"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 grow their customer acquisition online and in-store."

Vicki Cantrell
NRF Senior Vice President and Shop.org Executive Director

Paid search and email marketing lead retailers’ lists of effective customer acquisition channels, however, social media and mobile marketing are gaining traction and budgets. That’s according to the annual State of Retailing Online 2016: Marketing and Merchandising report, conducted by National Retail Federation and Forrester that surveys retail eBusiness executives at large and mid-sized retail companies, about digital marketing investments, mobile marketing efforts, and website merchandising tactics.

Released at Shop.org’s Retail’s Digital Summit the study also found that 92 percent of retailers surveyed are investing in social media marketing to some degree this year, second only to email (94 percent). Social media is not only a cost effective tool for many retailers, but it is also driving revenue.

“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. “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 grow their customer acquisition online and in-store.”

When it comes to paid social media specifically, 68 percent of retailers surveyed say they were seeing increased conversion from their paid Facebook efforts and 40 percent claim the same from paid Instagram efforts.

The study also found that mobile marketing continues to be a key area of investment for online retailers. Sixty-five percent of retailers surveyed plan to spend more on mobile marketing in 2016 than in 2015, specifically through smartphones. Retailers noted that their email subscribers open an average of 45 percent of emails on smartphones, ahead of an average of 41 percent on desktop devices and just 14 percent on tablets, underscoring that email is a top traffic driver to a mobile site.

Site merchandising connects all the dots for retailers looking to improve their customers’ online shopping experience – even across touchpoints. This year, 55 percent of retailers surveyed are increasing their online merchandising budgets and 44 percent are increasing their staff dedicated to web merchandising.

“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,” Forrester Vice President and Research Director Fiona Swerdlow said. “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.”

Sixty-three percent of retailers are investing specifically in content this year to ensure that customers are provided with imagery, peer reviews and other online assets to help them choose the right product and confidently hit ‘buy.’ Retailers’ next challenge: Optimizing this rich content for smartphones.

About the State of Retailing Online Report
The State of Retailing Online research series, which provides e-business and channel strategy professionals with annual industry benchmarks of marketing and business investment and activities, surveyed 240 companies in June and July 2016. Industries surveyed included apparel and accessories, footwear, general merchandise, home furnishings, personal care and sporting goods.

About NRF
NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs — 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s This is Retail campaign highlights the industry’s opportunities for life-long careers, how retailers strengthen communities and the critical role retail plays in driving innovation. NRF.com

About Forrester
Forrester (Nasdaq: FORR) is one of the most influential research and advisory firms in the world. We work with business and technology leaders to develop customer-obsessed strategies that drive growth. Forrester’s unique insights are grounded in annual surveys of more than 500,000 consumers and business leaders worldwide, rigorous and objective methodologies, and the shared wisdom of our most innovative clients. Through proprietary research, data, custom consulting, exclusive executive peer groups, and events, the Forrester experience is about a singular and powerful purpose: to challenge the thinking of our clients to help them lead change in their organizations.