What are retailers finding so tough about customer acquisition?
Through a special arrangement, presented here for discussion is a summary of articles from MarketingCharts, which provides up-to-the-minute data and research to marketers.
Retailers are not faring as well in their acquisition marketing efforts this year as they have in recent years, according to a new study.
Some 57 percent of those responding to a CommerceNext survey said that their acquisition marketing efforts are meeting or exceeding expectations year-to-date. While that’s a solid result, it’s down from 65 percent who said the same last year and 76 percent the year earlier.
In fact, the 114 retailers (incumbent and digital-only) surveyed have the least confidence in acquisition marketing and omnichannel marketing of all their initiatives.
A crucial issue is rising customer acquisition costs (CACs). When retailers were asked to look ahead and identify their greatest challenges to achieving their 2022 e-commerce goals, 61 percent pointed to rising CACs, followed by finding and retaining top talent, 46 percent; and adjusting to the changing landscape of customer data privacy, 33 percent.
Exploring the challenges around acquisition marketing, the top response this year again was diversifying marketing tactics beyond Meta and Google, cited by 45 percent; followed by measuring attribution, 43 percent; and justifying investments in hard-to-measure campaigns, 37 percent.
CommerceNext found that after absorbing two years of eroding KPIs due to rising CACs and CPMs (cost per thousand impressions) on established media channels, retailers spent the last year securing budgets and developing creative for new channels and are now emphasizing diversification.
Fully 69 percent of respondents expect to invest more in TikTok as an acquisition channel this year versus six percent planning to decrease it.
Other areas that look set for a net increase in spending include influencer marketing (57 percent expecting to increase versus eight percent planning a cut), YouTube (43 percent versus five percent, respectively) connected TV/streaming (42 percent and 10 percent, respectively), direct mail (38 percent and 15 percent, respectively), and podcast (25 percent to eight percent, respectively.)
For comparison’s sake, the retailers surveyed were more likely to be cutting (32 percent) their level of investment in Facebook/Instagram than increasing it (27 percent), per the report. Twitter, Snapchat and LinkedIn also saw lower net planned investments.
On a more positive note, fewer respondents this year say that they’re struggling with securing budgets, developing creative and scaling marketing investments.
- What Are Retailers Finding Tough About Customer Acquisition? – MarketingCharts
- The Ascension To Digital Maturity: A Benchmark Report – CommerceNext
- Retailers Worry About Rising Customer Acquisition Costs as Paid Social KPIs Decline – MarketingCharts
- 2022 Digital Trends & Investment Priorities Report – CommerceNext
DISCUSSION QUESTIONS: What’s the best path for digital marketers to overcome the customer acquisition cost challenges related to paid social? Where do you expect digital marketers will find the most success diversifying beyond Meta (Facebook/Instagram) and Google?