Retailer investing more in Digital Marketing for 2012 Holiday.

21214After being little more than a blip on the radar in 2007, social media is now essential to marketing in the retail industry. According to a recent BDO USA, LLP survey, 86 percent of retail CMOs have included social media in their marketing strategy, continuing a dramatic rise from just four percent of retailers who did so in 2007. In a nod to its growing importance, retail CMOs say social media accounts for 10 percent of their holiday advertising and marketing budgets this year.

With Google reporting that four out of five consumers plan to use their mobile devices to shop this year, it’s clear that mobile marketing is becoming increasingly important. Half of the CMOs surveyed say they have included mobile in their marketing strategy, up 39 percent from 2011, but still showing that many retailers are playing catch up with the platform’s exponential growth.

“Over the past five years, we’ve seen an enormous change in the way retailers are marketing to consumers during the holidays,” says Stephen Wyss, partner in the Retail and Consumer Products practice at BDO USA, LLP. “The growth in social and mobile marketing gives retailers more opportunities to acquire and engage customers, and we expect the returns from the holiday push in these platforms to be significant.”

These findings are from the most recent edition of the BDO Retail Compass Survey of CMOs, which examined the opinions of 100 chief marketing officers at leading retailers located throughout the country. The retailers in the study are among the largest in the country, including 20 retailers in the top 100 based on annual sales revenue. The telephone survey was conducted in September and October of 2012.

Additional findings of the 2012 BDO Retail Compass Survey of CMOs include:

Digital channels see a bigger share of marketing dollars. While a majority of CMOs (67 percent) say their holiday marketing and advertising budgets are flat this year, there are notable shifts in the way budgets are being divided. Print advertising is the top expenditure for 42 percent of CMOs, but this year 31 percent say they will spend the most marketing dollars online, including social media sites. This marks a 35 percent increase in the number of CMOs giving the most resources to online marketing and advertising over last year. Broadcast advertising remains the top expenditure for 22 percent of CMOs, down slightly from 2011.

Big data presents a big challenge and opportunity. Retailers were early adopters with big data, but the amount of customer data they now have access to through in-store purchases, email, social media, and e-commerce and mobile sales has skyrocketed. Nearly all (93 percent) of CMOs surveyed say they find it a challenge to integrate and manage the data, and 40 percent specify that it is “very challenging.” Still, the opportunity to use that data to provide better service and generate revenue is clear. By looking at what products are purchased together, and when and where they were purchased, retailers can glean insights on optimal product assortment and timing of merchandise introduction. Two-thirds of retailers (66 percent) say they will increase their use of customer data for targeting efforts in the next year.

Retailers focus on Facebook, many exploring Pinterest. Among the retailers who are incorporating social media into their marketing efforts, 99 percent say they are focusing on Facebook. In addition to engaging with consumers and sharing promotions on Facebook, more retailers, including Brookstone and, are now able to use the platform for e-commerce. Retailers are also looking to capitalize on the popularity of Pinterest, which is currently the third busiest site after Facebook and Twitter, according to comScore. One in five retailers say they are marketing on Pinterest this holiday season. Twitter also remains a popular site for 51 percent of retailers.

CMOs pursue a variety of mobile tactics to reach shoppers. When asked which kinds of mobile promotions they are most focused on, retailers are divided. Flash sales and daily deals are the top priority for 29 percent of CMOs, while 23 percent are most focused on text messages and 20 percent on mobile coupons. Because mobile is still a new platform for marketers, they are exploring many avenues to reach and engage shoppers. This holiday season, retailers have been slowly rolling out new forms of mobile engagement, including in-store GPS and apps that provide product reviews. According to the survey, the development of mobile apps is the primary tactic for 14 percent of CMOs, and another 14 percent cite QR codes.

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