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Retailers to spend $220.9 million on mobile this year: Shop.orgBy
Retailers are flocking to mobile marketing, with 91 percent either having a mobile strategy in place or in the process of developing one, according to a new report from Shop.org.
In comparison, only 74 percent of retailers a year ago had a mobile strategy. The State of Online Retailing report, which surveyed 68 companies, points to retailers growing interest in experimenting with mobile in order to reach consumers.
“I think the report very much speaks to the increasing convergence of channels,” said Fiona Swerdlow, head of research at Shop.org, Washington. “Mobile has evolved very quickly into a channel that retailers will continue to invest in in response to consumer usage and demand.”
The report was conducted by Forrester Research.
While mobile marketing did not feature prominently in retailers’ online marketing budgets last year, 16 percent of retailers plan to increase their mobile marketing spend in the coming year.
The average online budget for retailers last year was $5.5 million, with biggest investments going to paid search (37 percent) and email (17 percent).
Overall investment in mobile is also growing. Retailers invested $34.8 million in mobile last year and $14.6 million in tablets. These numbers increase significantly for 2011, with retailers planning to spend $220.9 million on mobile and $14.6 million on tablets.
Traffic doesn’t reflect investment
The report also shows that overall traffic and revenues to Web sites from smartphones has not increased significantly even with the investment made by retailers.
Traffic from mobile Web browsers grew 4 percent last year. Tablet traffic, as a percent of mobile, grew 21 percent.
And, online revenue through mobile grew 2 percent.
Despite the investment in mobile, retailers strategies are not fully fleshed out yet.
For example, only 48 percent of respondents have an optimized mobile Web site and only 13 percent have engaged in SMS.
There is also still room to grow in the app space, with 35 percent of respondents having an iPhone app, 15 percent having an Android app or an iPad presence and 6 percent having a BlackBerry app.
Respondents indicated that their objectives are virtually the same for both smartphones and tablets, including using these devices to drive sales, improve customer satisfaction and build brand loyalty.
However, in order to improve results for both, retailers should think more about differentiating the experiences.
“If you have the same objectives for both, you’re not focusing on what each does best,” Ms. Swerdlow said.
“Smartphones have a small screen but are very handy when you’re on the go,” she said.
For retailers, this might mean thinking about how smartphones are useful in the store and on the go.
“Tablets have a big screen and deliver a rich experience,” Ms. Swerdlow said. “Use the richness of the experience to deliver all kinds of content.”
Retailers should also think about how to make their mobile experiences as useful to consumers as possible. This does not mean building in traditional Web site features such as product information and a store locator, which retailers currently do, but adding such consumer-friendly features as in-store product availability, store maps and real-time coupons.
Currently, 54 percent of retailers offer product information via their mobile app or Web site while 42 percent offer store information. And, while only 16 percent are offering shipping notification, 44 percent plan to offer this information in the future.
In addition, only 8 percent offer the ability to access a store loyalty program while shopping but 24 percent plan to add this functionality. And, only 2 percent of retailers currently offer real-time coupons while customers are shopping in a store with 15 percent planning to add this service.
The report also showed that 72 percent of retailers plan to invest more heavily in social networks this year.
Social is proving its strength as a customer acquisition tool, coming in fifth place on a list of the most successful customer acquisition sources.
However, retailers pointed to the lack of transparency into the return on investment associated with social.
In the study, 62 percent of respondents said the returns on social marketing is unclear while 61 percent said the primary ROI from social is getting a better understanding of customers.
For mobile, at least, retailers shouldn’t be overly concerned about revenue and traffic metrics, per Ms. Swerdlow.
“If one were to measure the success of a mobile strategy purely in terms of revenue and traffic, that’s only part of the picture,” she said.
“Retailers should think about how they can use the smartphones that are already in consumers’ hands to provide a better in-store experience.”
Forrester on multichannel shopping
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