Social Media Gains Traction Among Top Marketing Tools

WASHINGTON, D.C. — Although paid search and email marketing lead retailers' list of effective customer acquisition channels, social media and mobile marketing are gaining traction, according to the annual "State of Retailing Online 2016: Marketing and Merchandising" report, conducted by the National Retail Federation (NRF) and Forrester.

The report surveyed retail e-business executives at large and mid-sized retail companies on topics including digital marketing investments, mobile marketing efforts and website merchandising tactics. The survey found that 92 percent of retailers are investing in social media marketing to some degree this year, second only to email (94 percent).

"Although email and [search engine optimization] 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," said NRF Senior Vice President and Shop.org Executive Director Vicki Cantrell. "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 said 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 plan to spend more money on mobile marketing in this year than in 2015, specifically through smartphones. Retailers noted that their email subscribers open an average of 45 percent of emails on smartphone vs. 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, NRF noted.

Retailers looking to improve their customers' online shopping experience are using site merchandising, cited by 55 percent of retailers who are increasing their online merchandising budgets and 44 percent that 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," said Fiona Swerdlow, vice president and research director for Forrester, a research and advisory firm. "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 noted they will also be 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, which ultimately leads them to making a purchase.

Headquartered in Washington, D.C., NRF is a retail trade association representing discount and department stores, home goods and specialty stores, merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries.