Want to know where you should be aiming your e-commerce investment to increase online sales?
We asked 100 senior decision makers from leading global retail brands, who were attending the latest Internet Retailer conference, about what they are planning to invest in over the next 12 months.
Looking at the results, there are three key areas that really stood out amongst respondents:
Website investment comes out on top
Despite the buzz surrounding social or mobile as the next frontiers in e-commerce, the final conversion still occurs on a retailer’s website in the majority of cases, with only 5% reporting having received transactions on social sites.
No surprise then that retail giants are still focusing investment on their e-commerce site. Over the next 12 months, 59% of respondents will make the greatest investment on their websites, followed by 35% on mobile and 22% on social networks.
The number looking to invest in mobile is low, considering the growth in mobile use and the relative lack of investment in the channel by many firms.
According to Econsultancy’s Marketing Budgets 2012 survey, consumers are spending roughly 7% of their time on mobile devices, but companies are investing only 0.5% of their marketing budgets in mobile advertising.
TIP: With the rise of mobile and social, it is easy to become distracted and move away from areas of the business that, while not new, are still vitally important.
For most retailers, an e-commerce website remains the focal point and key revenue generator where most transactions would take place. In many cases, mobile and social channels are deployed to drive traffic to the website, and the website is where conversion happens. So making sure your website is up to scratch is fundamental to business success.
Rise in affiliate marketing
Elsewhere the results show a rise in affiliate marketing, a technique that is becoming popular to drive sales. Amongst those we questioned, 25% said they plan to invest in affiliate marketing over the next year as a cost-effective way to drive new revenues.
After asking the respondents about successful affiliate programmes elsewhere in the industry, Amazon came out on top, cited by 47%, followed by eBay, Shopkick and Wrapp.
TIP: Affiliate marketing is particularly effective for retailers as it is pay on results and has the ability to expose your products to more customers.
By investing in monitoring and measurement, retailers can carefully identify the affiliate networks that are really making a difference.
Time to start pinning
While the level of investment isn’t as high as with websites, social media still plays a vital role in retail planning for next year.
In the survey, 74% of respondents are using social networks to increase online visibility, not just for sales. Increased visibility is the main driver for social media investment.
It was interesting to note that Pinterest is seen as an increasingly important tool for retailers to use, with 35% of the respondents trying out the new service. This is compared to 74% of respondents using Twitter and 89% using Facebook.
TIP: As with our first point, it is easy to jump on the ‘shiny new thing’ bandwagon. But Pinterest is an example of a network that, for certain retailers, has shown proven results already. So while caution is needed, experimenting with new channels could usher in some important new revenue generators.
Planning where to invest can be hard for any retailer and this opportunity to get insight into how leading companies are planning for the next 12 months is therefore particularly insightful.
While there are perhaps few surprises here, with the growth of multichannel customer requirements, retailers are increasingly having to experiment with new ways of interacting and engaging with their target audience, using new tools and techniques to guarantee competitive advantage and ROI from marketing programmes.