Mobile becoming a bigger part of the marketing mix, CMOs say
CHICAGO — A number of chief marketing officers have increased their overall marketing budgets for 2014 with a focus on the enhanced omninchannel shopping experience, according to a BDO USA survey released Tuesday.
CMOs at leading U.S. retailers say their overall marketing and advertising budgets will rise by 1.1% this year, compared to a decline of 1% percent in 2013. And one-in-four say that they have changed their holiday marketing strategy this year in response to consumers’ demand for a more seamless experience across channels.
“More retailers are waking up and investing in mobile, and this year really signals a turning point in how they are vying for consumers’ attention during the peak holiday season,” said Natalie Kotlyar, partner in the Retail and Consumer Products Practice at BDO. “Mobile engagement is quickly becoming table stakes when it comes to winning over new customers and converting sales in November and December. The most successful retailers will be those that are out in front, experimenting with new technologies and developing the convenient shopping experience demanded by today’s customers.”
Of those retailers focused on a more seamless experience across channels, 100% are using consistent pricing across channels, 95% are using consistent promotional strategies across channels and 86% are expanding product delivery options for customers.
Over the last several years, mobile has emerged as a critical platform in retailers’ holiday marketing playbooks, both for engaging customers and converting online sales. Approximately half of all retailers (49%) plan to include mobile technology in their holiday marketing strategy this year, a jump from 38% in 2013. Overall, retailers will spend 14% of their marketing budgets on mobile, up from 6% in 2012. Following a seven-year trend, social media remains a highly popular holiday marketing tactic. The 84% of retailers using social media this year say that it will comprise an average of 19% of all marketing efforts, up from 14% in 2013.
Additional Findings of the 2014 BDO Retail Compass Survey of CMOs Include:
Consumer data challenges top-of-mind amid slew of data breaches in 2014. As large-scale data breaches and cyber threats targeting web-based platforms have dominated headlines this year, retailers remain cognizant of their perceived cyber risks in the run up to the holiday season, especially after Target’s costly breach last December. In fact, concerns over the risk of data breaches spiked this year, with 17% of surveyed retailers calling it their No. 1 challenge pertaining to the vast amounts of consumer data, up from 2% in 2013. Meanwhile, roughly 1-in-3 (34%) retailers perceive risks related to potential data breaches and cyber security to be higher this year than in 2013;
Overall, as retailers look to effectively manage and leverage their troves of customer data accessed through in-store purchases, e-commerce and social media, 72% find the process challenging, and 45% find it very challenging. While best practices are still emerging around big data, retailers are more comfortable when it comes to using consumer data for marketing efforts, with only 28% of CMOs surveyed this year citing this as their top challenge — an improvement from 44% last year; and
Retailers focus on Facebook, Twitter and LinkedIn to connect with customers. As more consumers begin and end their holiday shopping online, retailers continue to leverage social media sites to spread promotions and help convert sales. Consistent with last year’s findings, the vast majority of retailers (76%) will be featuring Facebook campaigns this holiday season, while Twitter and LinkedIn remain the second- and third-most popular social networks among retailers, with 27% and 21%, respectively, using these platforms. With greater online competition and increased promotional activity this year, retailers are also beginning to experiment more with “buy buttons” on platforms such as Facebook and Twitter, which could help boost the conversion rates and ROI of their social media activity.
The BDO Retail Compass Survey of CMOs is a national telephone survey conducted by Market Measurement, an independent market research consulting firm, whose executive interviewers spoke directly to chief marketing officers, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation’s retailers.