E-Commerce and the Digital Marketing Strategy

Transcription

1 The Evolution of Digital Marketing for European Retailers A WBR Industry Benchmark White Paper Presented in Conjunction with Bronto Software, Inc. November 2014

2 The Innovation in Digital Marketing for Executive Summary: In August of 2014, Bronto and etail Europe canvassed industry experts, including Heads and Directors of e-commerce, CEOs, Marketing Directors and other senior level retail professionals, to assess how European retailers are leveraging new technologies and marketing channels. We surveyed a total of 47 respondents across 10 European countries about their ability to adapt in this rapidly evolving field. During a time of unprecedented growth for e-commerce, it is easy to see why retailers are investing in online marketing at a greatly increased rate. Digital sales have become a key source of revenue for retail businesses of all shapes and sizes, with large increases both for online-only retailers and the online sales channels of traditional bricks and mortar stores. Seeking a greater and greater share of this boom in online sales, retailers are competing with each other for online visibility more than ever before. Whether it s in paid search or SEO, retailers know that they need to be seen if they want to sell. Meanwhile marketing remains a potent weapon in the arsenal of the online retailer. Businesses across the sector are striving to find efficient platforms which will help them confront common challenges such as customer re-engagement and shopping basket abandonment. Key Findings 54% of retailers allocate 50% or more of their marketing budget toward e-commerce. On average, digital sales account for 1/3 of total sales. 69% of respondents plan to increase their marketing budget over the next 12 months. PPC + SEO are the largest areas of investment. Automation, Personalisation and A/B testing are the most important marketing features for European retailers. The majority of digital marketers consider SEO to be the most critical function for digital marketing. 2

3 Part 1: Budget Allocation The interesting conclusion is that companies generally opt to take an almost-all or almostnothing approach to marketing budget allocation. 54% of respondents allocate at least 50% of their marketing budget toward e-commerce. What percentage of your marketing budget is allocated toward e-commerce? 54% allocate 50% or more 1% 0% 32% 1-10% 14% 11-49% 30% 50-99% 24% 100% Considering the astronomical costs of running physical outlets against a digital-and-warehouse operation, the bottom line results could be even higher for pure play retailers. On average, digital sales account for 1/3 of the turnover of average bricks & mortar companies with typical sales channels. How much of your turnover is from online sales vs. in-store? 36% online turnover 65% In-Store 36% Online 3

4 Marketing is still the most dominant channel for investment over the next 12 months. 69% of respondents plan to increase their budget, 29% plan to stay the same and just 2% will reduce spend. How do you plan to adjust investment in the following channels within the next 12 months? Marketing Increase Stay the same Decrease Did not answer 74% 26% Social Media Mobile (Site Design) Mobile (Apps) 68% 30% 2% 79% 21% 53% 43% 4% Omnichannel Initiatives e-commerce Platforms Web Analytics/ Data Management 68% 24% 4% 4% 66% 32% 2% 72% 28% The only channels that did not show any proposed decrease in budget allocation are marketing, mobile site design and web analytics/data management. This is in line with the biggest trends in e-commerce: ensuring a seamless user experience (mobile), retaining customers ( marketing), and gaining a competitive advantage through customer insights (web analytics/data management). Mobile app investment will decrease by 4% while mobile site design is seeing an increase in investment of 79%. It looks like retailers are seeing more value in the redesign of the site than in building a new mobile app. Kestrel Lemen, Marketing Strategist, Bronto Software 4

5 SEO is the most critical function for Digital Marketers [87%]. Despite 1/3 of the UK population being daily Facebook users, respondents are not as inclined to invest in social media as a marketing tool as they are with other digital channels. How important are the following areas of digital marketing? Critical Nice to have Unimportant Marketing 83% 17% PPC 68% 28% 4% Social Media shows the most surprising result. It manages to feature the highest percentage that spend 100% and the highest percentage that spend less than 25%. It is becoming increasingly clear that there needs to be a much greater focus on marketing in the social space over the next few years in order to keep reaching customers in the places they most regularly communicate online. SEO Mobile Checkout 87% 13% 60% 36% 4% Social Media 49% 45% 6% Looking elsewhere, we can see that PPC & SEO are by far the largest areas of investment. What percentage of your digital marketing budget do you spend in these areas? Search PPC Social 100% More than 75% 50% Less than 25% 0% 2% 13% 21% 62% 2% 2% 13% 27% 45% 13% 4% 2% 9% 74% 11% Mobile 2% 11% 6% 64% 17% marketing 2% 11% 6% 77% 4% 5

6 Search and PPC are the channels that European retailers state drives the most revenue. We still see the dominance of Search, PPC and Marketing as the top channels that drive the most revenue for retailers. Which of these channels drive the most revenue [Rank highest to lowest]? RANK Search 27% 49% 9% 9% 4% 2% PPC 40% 32% 11% 11% 2% 4% Social 2% 9% 15% 23% 36% 15% Mobile marketing 9% 4% 21% 26% 34% 6% 12% 4% 43% 21% 11% 9% Other 9% 2% 2% 11% 13% 63% Plenty of competition means prices are likely to remain competitive and on-going product development will remain essential for software houses to keep ahead of the game. Part 2: Marketing There are as many e-commerce solutions as there are customers and there is little to no consensus on which one is the industry standard. Which e-commerce platforms do you currently use? 68% chose Other 6% Magento Community 2% Magento Enterprise 9% Hybris 4% Demandware 10% ATG 13% Shopify 4% Venda 2% Episerver 68% Other (please specify): In-house solution IBM Websphere Commerce Suite Storm On demand bespoke opencart marketbook.ru Yahoo Homegrown Rakuten Blackboxx Scensum Broadleaf 6

7 The results here indicate that many retailers are taking a multiple touch approach to address basket abandonment, but the majority (55%) are still at least sending one followup abandoned basket message. Follow-up s, as well as clear calls-to-action on the website, are still the most used tactics in addressing shopping basket abandonment. How are you addressing online shopping cart abandonment [choose all that apply]? 55% Sending one follow-up 40% Clear calls-to-action on the website 36% Provide alternative payment methods 32% Being up front about fulfilment costs on the basket page 26% Other 19% Remove compulsory registration during the checkout process 17% Send a series of follow-up s 6% Sending a follow-up SMS message is extremely important to our participants with 98% having either a third party or in-house marketing solution. While marketers agree a solution for is critical, one in four believes their needs are not being met by the solution they have in place. A quarter of those that have a solution are planning to change within the next 12 months. Do you have an marketing provider? 83% have a provider 60% Yes, no plans to change provider. 23% Yes, plan to change provider in the next 12 months. 15% No, we use an in-house platform. 2% We don t have an marketing service provider. Retailers see the value in a having an marketing service provider. Over 83% of respondents use an ESP rather than trying to manage marketing with an in-house solution. Just 15% of respondents use an in-house solution, which is good news for providers who dominate the market at 83%. 7

8 Automation, Segmentation/ Personalization and A/B Testing were tied at 70% as the most important features needed by a marketing automation platform, all of which combine to really highlight what makes marketing so important and still so relevant. The results here are a good indicator that companies, in particular retailers, still recognise the need for these features. 70% of retailers state that automation is essential for their marketing program. What kind of features do you need from your marketing platform [choose all that apply]? 70% A/B testing 70% Personalisation/Segmentation 70% Automation 64% Analytics 62% Responsive design s 55% Integration with other systems/ applications 49% Mailing list management capabilities 45% Templates 17% More robust messaging When we dive deeper to see what kinds of automation they are implementing, it is no surprise that Order/Shipping confirmation messages are the most frequent. However, it is interesting to note that while abandoned basket messages are such strong revenue drivers, only 14-30% of retailers are actually sending any kind of abandonment message. Kestrel Lemen, Marketing Strategist, Bronto Software For our participants, gathering measurable ROI and ease of implementation are level pegging for first place. What are the most important features when choosing an marketing platform [choose all that apply]? 55% Measured ROI 55% Ease of implementation 53% Analytics and reporting 40% Integration with other platforms 34% All of the above 28% Features 23% Services 8

9 It is good to see that, amongst all available options, a significant proportion of our pool are gathering and using the data available to them. However, the newer areas of multichannel and multidevice analytics are still not being used by the majority of retailers. This has been a large problem in recent years as developers have tended to favour the glamour and relative simplicity of Apple idevices over developing for the more variable world of Android, despite Android now dwarfing ios at 73.3% vs 16.6% market share across Europe. What is slightly concerning is how low Features ranks in the available options. This could indicate that is seen as a stalwart of the marketing arsenal, where all the options that matter have already been exploited. As such, additional features are neither wanted nor likely to be used, which could cause the medium to stagnate and cease to provide the ROI it currently enjoys. Retailers seek to have an easy to integrate marketing platform. This ease may be interpreted as a way to easily marry up customer data from their e-commerce platform to seamlessly report and measure ROI, which was also tied for the top feature requirements of an EMP. What kind of data do you collect and use? Collect and Use Collect and Do Not Use Do Not Collect Did not answer Post-Purchase Data 70% 15% 9% 6% Shopping Basket Data Channel Preferences Device Preferences 70% 17% 9% 4% 44% 35% 17% 4% 47% 32% 19% 2% The areas of biggest concern are those large bands of red. There are likely many reasons why retailers do not have access to certain analytics, and these must be addressed to ensure they remain competitive in the coming years. However, those in the red in this chart already have access to the data but are not yet using it, even when a large proportion of their competitors are. To stay ahead of the game, retailers must make the time to factor in these analytics to their strategic decisions or risk being left behind and losing revenue. 9

10 While the vast majority of respondents send out automated welcome s to new clients, there are still 11% that do not. Less than a third of retailers surveyed followed up on unpaid baskets, and a third are not planning to do so in the future. While many retailers recognize the need for welcoming new customers by , many are not currently taking advantage of easy to implement strategies such as a welcome series, birthday s, reorder s and basket reminders, all of which can both engage customers to higher levels of loyalty and capture missed revenue. Which triggered / automated messages do you currently send? Currently Sending Plan to Send Stopped Sending Do Not Send Did not answer Welcome s Welcome Series Order / Shipping Confirmations Multi- Post- Purchase Series Reorder / Replenishment Reminders Shopping Basket Reminders Birthday s Reengagement / Reactivation s Loyalty Program Reminders 87% 9% 2% 2% 34% 23% 22% 21% 94% 6% 38% 34% 2% 17% 9% 25% 28% 2% 32% 13% 30% 23% 4% 30% 13% 21% 38% 4% 24% 13% 47% 32% 2% 6% 13% 40% 26% 2% 21% 11% 10

11 Contact Bronto Bronto Software, Ltd. 3rd Floor 21 Farringdon Road London EC1M 3HA United Kingdom Direct (UK and Europe) Fax: About Bronto Bronto Software provides a cloud-based marketing platform for organizations to drive revenue through their , mobile and social campaigns. Bronto is the number one ranked marketing provider to the Internet Retailer Top 1000 with a client roster of leading brands worldwide, including Armani Exchange, Samsonite, Hostelworld, Direct Golf and Moda en Pelle. The Bronto Marketing Platform is deeply integrated with commerce platforms including Magento, Demandware, NetSuite and MarketLive. The company is headquartered in Durham, North Carolina with additional offices in London and Sydney. For more information, visit bronto.co.uk. 11

12 For more information, please contact: Tanyel Ali Head of Digital Sales Tel: +44 (0) About WBR Digital We are a team of content specialists, marketers, and advisors with a passion for powerful marketing. We believe in demand generation with a creative twist. We believe in the power of content to engage audiences. And we believe in campaigns that deliver results. With senior executives from medium-sized businesses and Fortune 1,000 companies attending more than 100 WBR events each year, we are uniquely positioned to energize your organization s marketing campaigns with a full array of services, including proprietary market research and analysis, custom digital events, webinars, and precisely-targeted demand generation activities. Please visit: digital.wbresearch.com 12