Saturday, December 15News That Matters

Retail marketers focus on tangible results – DigitalCommerce360


EBay Inc. CEO Devin Wenig has an ambitious goal: He aims to have 500 million active users shopping on the e-commerce pioneer’s online marketplace, which is nearly three times the 177 million it had as of Sept. 30.

To get there, he expects to rebrand eBay as the online destination where consumers can find the exact item they’re looking for—be it a unique fashion item, the latest electronics or just about anything else—at a low price without having to pay a membership fee a la Amazon Prime, Amazon.com Inc.’s loyalty program that charges most U.S. members $119 per year fee to belong to. The repositioning starts with plans to significantly boost marketing spending. The online marketplace in late July mapped out plans to increase its marketing spending in the latter half of 2018 and into 2019, with Wenig noting, “We’re going to spend a lot of money to bring new buyers onto the platform.”

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Those dollars are flowing to ads across a number of marketing channels, including search, email, TV, radio and, most notably, social media. Social media is a “critical lever” for eBay’s marketing and media strategies, Suzy Deering, the online marketplace’s chief marketing officer, tells Internet Retailer.

“We’re focused on creating quality interactions with the eBay brand, raising brand awareness and consideration, driving relevant traffic and, eventually, generating buyer growth and sales,” she says.

Increasingly, those interactions are coming via influencers—consumers who are paid to produce content that they distribute on social channels—to appeal to younger consumers. “The personal endorsement provides an unexpected connection and can generate additional buzz around your brand,” she says.

EBay, which already grew its sales and marketing spending 16.8% in the first three quarters of 2018, has plenty of company among retailers that plan to increase their focus on influencer marketing next year. 38.1% of online retailers in Internet Retailer’s fourth annual Digital Marketing Survey currently use influencer marketing, while 49.4% plan to do so next year.

Of course, social media and influencer marketing are far from the only marketing channels where retailers are increasing their spending; 70.9% of respondents increased their overall digital marketing budgets this year—including 22.1% of respondents who boosted their spending more than 20%. That growth is in line with a broader trend: U.S. retailers’ digital ad spending is expected to rise 18.7% this year to $23.5 billion from $19.8 billion in 2017, according to eMarketer Inc. The research firm expects retailers’ total digital ad spending to jump another 17.4% next year to $27.6 billion.

There are a host of factors behind that growth, including large e-commerce players such as Amazon (its marketing spending is up 34.3% through the three quarters of 2018 versus last year) and Wayfair Inc. (up 41.0% for the same period) significantly boosting their overall marketing spending, and the rising costs of many ad formats. Moreover, there’s plenty of room for retailers to reallocate their marketing spending to digital channels. After all, 18.6% of Internet Retailer survey respondents said digital advertising accounts for 20% or less of their overall marketing budgets.

Internet Retailer bases its findings on the anonymous responses of 86 participants—a mix of retail chains, web-only retailers, manufacturers and business-to-business sellers—who completed an online survey in August. These e-retail marketers are allocating their spending across a number of digital channels to drive consumers to make a purchase—online or offline—and to boost brand awareness. And while it is a never-ending challenge for retailers to determine their ideal marketing mix, the importance of doing so is growing as…

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