NRF: Facebook ranks at top for social media marketing

WASHINGTON, D.C. — While paid search and email marketing still top retailers’ lists 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 — conducted by Shop.org, Forrester Research Inc. and Bizrate Insights — 25% of retailers surveyed cited Facebook as a top acquisition platform. Underscoring retailers’ heightened use of social to complement search, email and affiliate marketing tactics, 58%  are increasing their year-over-year spend on social media marketing, second only to the number of companies who 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 SVP 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 (50%) of retailers surveyed said they are 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%).

As more companies look for ways to grow their e-commerce business and diversify their traffic drivers beyond search, retailers are also exploring online retail marketplaces — whereby 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%).

“From Walmart and Alibaba, to Sears and Macy’s — the collective world of e-commerce has integrated the use of marketplaces into their business and benefited from the increased customer traffic,” said Forrester VP and rincipal analyst, Sucharita Mulpuru. “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 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 smartphone (55%), tablet (46%) and desktop (41%), and are also enhancing product pages and improving the checkout process across devices, among numerous other improvements. To that end, 63%  of retailers surveyed increased their online merchandising budgets this year compared with last, while almost half (49%) also increased their online merchandising staffing.

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 May and June 2015. Industries surveyed included apparel, footwear, general merchandise, home furnishings and personal care.