Most Recent Articles In Direct, Internet and Catalogue
Latest Direct, Internet and Catalogue Articles
- India’s Tata Expands Into E-commerce
- Fab.com Collaborates With Lena Dunham’s Lenny Letter
- Nicole Richie’s House of Harlow 1960, Revolve Team on New Collection
More Articles By
A back-to-basics approach is taking hold of retailers looking to win online.
This story first appeared in the July 16, 2013 issue of WWD. Subscribe Today.
It might not be as sexy as social media, but paid search and e-mail marketing are garnering the lion’s share of digital investment. In “The State of Retailing Online 2013: Marketing & Merchandising,” a study to be released today by Shop.org and Forrester, research shows that e-mail and paid search across devices are the top priority, followed by personalization and bolstering digital marketing teams to support these efforts.
With over 40 percent of e-mails being opened by consumers on a smartphone or tablet, Sucharita Mulpuru, vice president and principal analyst at Forrester Research, contends that there is continued emphasis on making sure that retailers are not losing customers on mobile.
“Retailers aren’t really spending media dollars on social, except on Facebook. They interestingly are hiring people, which indicates that there are people focused on Pinterest and Instagram pages, but not necessarily buying ad units or optimizing those ad units,” she added, noting the three areas in which retailers are focusing their digital spend: e-mail, big data (including hires to concentrate on e-mail and marketing analytics) and mobile.
As organizations find that search engine marketing and e-mail are driving consumer acquisition — and social media less so — they are, on average, dedicating 55 percent of online marketing spend to this space. Almost nine of 10 retailers surveyed either already have mobile e-mail optimization functions in play or plan to roll them out later this year, and 71 and 73 percent will optimize paid search for smartphones and tablets, respectively.
This comes as no surprise, as New York University think tank Luxury Lab, or L2, reported last week that search drives 45 percent of stores’ average Web traffic (including paid and organic searches).
Mulpuru also noted that Google’s product listing ads, or PLA’s — picture ads which were free until last year — can’t be ignored. Research reflects acceleration here — and search numbers become even more significant when taking PLA’s into account.
“It’s a controversial topic. The jury is still out — some people think PLA’s are amazing, others don’t — but it’s a pretty significant part of spend. People are a bit miffed because it’s something they used to get for free and now they have to pay for it,” Mulpuru said. “Google is not a nonprofit and the core search business is mature. That share of the marketing dollar that goes to Google continues to be very large.”
Brian Pitz, managing director of Jefferies & Co., told WWD that clothing and shoes has become the top PLA vertical for advertisers in the U.S., followed by home and garden, beauty and personal care, sports and recreation and food and restaurants, as well as the biggest growth category. From spring 2012 to June 2013, there has been a 410 percent increase in the number of advertisers in this space and 145 percent growth in the number of total ads.
Citing research conducted by the firm released Friday that tracked about 9,400 advertisers, PLA usage is up 54.7 percent from March of this year alone.
“The bottom line is that Google is spending more and more time on retail. Our view is that as more commercial queries [come about] — people looking to purchase — they are stating to monetize more of those commercial queries with these PLA’s,” said Pitz. It’s clear that these paid-for picture ads result in significantly higher conversion rates than just “blue links.”
Although the top three PLA advertisers were search engine marketers hired on behalf of smaller clients — Kenshoo’s xg4ken.com, Adobe Efficient Frontier’s eversttech.com and Rimm Kaufman Group’s rkdms.com — Pitz said that clothing and footwear verticals in particular have become more aggressive about PLA’s. Wal-Mart, eBay, Macy’s and Amazon were ranked four, five, eight and 11, respectively.