Retailers prove slow to adopt new tools

WARC, 2 December 2011

NEW YORK: Most US retailers are proving slow to adopt marketing tools like mobile and daily deals, instead favouring traditional media as a means to reach their target audience in challenging times.

Based on a poll of 100 senior executives in this sector, BDO, the services firm, found 65% of retailers plan to maintain their advertising and marketing spend in the holiday period year on year.

Of the sample, 20% expected to boost budgets, compared with 17% in the 2010 study. However, the average projected increase came in at a modest 0.4% in all.

Some 27% of contributors anticipated directing the "bulk" of their expenditure to broadcast media, compared with 25% in 2010.

"While CMOs remain cautious, increased spending on a pricier medium signals they are trying to reach a larger audience in order to capture more sales this season," the study said.

Print retains the lead role overall, as 44% of retailers will divert the greatest single portion of their outlay to newspapers and magazines, an annual uptick of two percentage points.

Online advertising will be used as the lead medium by 23% of respondents, and the equivalent share for outdoor is 5%.

Elsewhere, the survey discovered that 82% of featured organisations are currently using social networks, measured against 75% in 2010 and 51% in 2009.

Facebook is the most widely-used platform with a 94% uptake rate. Twitter was in second place with 47%, but this figure had actually declined from 61% in 2010.

The analysis also revealed 12% of the companies had established an official presence on LinkedIn, 11% had one so on YouTube and 8% on FourSquare.

Despite the plethora of interactive tools now available, a 53% majority of retailers agreed online search was the primary way shoppers found them on the internet, up from 30% last year.

Just 33% of the sample stated "flash sales" and daily deals sites were part of their marketing mix, and only 36% included mobile in their holiday strategies, with 84% of this group allocating the medium less than 10% of budgets.

"Mobile marketing is still in the experimental stage, and flat holiday advertising budgets do not leave much room to test new waters," said Steve Ferrara, a partner at BDO. "Still ... we expect to see huge growth for mobile as it follows the same trajectory of the now-ubiquitous ecommerce channel."

Data sourced from BDO; additional content by Warc staff

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