Survey: Online retailers boosting mobile marketing initiatives
Washington, D.C. Consumers’ increasing appetite for mobile applications is driving online retailers to speed up their mobile marketing initiatives. According to a Forrester Research study produced in partnership with Shop.org, the National Retail Federation’s digital division, nearly three-quarters (74%) of online retailers either already have or are developing a mobile strategy. One-in-five boasts having a fully implemented mobile strategy in place already.
The survey of 109 companies is part of “The State of Retailing Online” research series, which provides eBusiness professionals with an annual industry benchmark for marketing and business investment and activities.
“Mobile investment is modest now, but we see that it will pick up in the future, especially among the biggest brands that have already invested significant amounts in their mobile operations,” said Sucharita Mulpuru, VP principal analyst, Forrester Research, and lead author of the report.
Earlier this year, Forrester forecast U.S. online retail sales to total $173 billion in 2010.
According to “The State of Retailing Online: Marketing, Social Commerce and Mobile Report,” web retailers with mobile strategies:
- Are investing in features that support the cross-channel experience. Product and price information, store information, and coupons to support the in-store experience are among the most popular features that retailers are offering consumers;
- Have varied level of investment. While respondents anticipated spending on average $170,000 on their mobile sites this year, large multichannel retailers are spending several times that amount, while smaller online pure plays on average are investing much less;
- Are experiencing modest gains. Retailers reported that their mobile browsers at this juncture are generating a little less than 3% of overall site traffic and just 2% of revenue;
- Tried and true marketing tactics such as paid search, email and affiliate marketing command the biggest percentage of an online retailers’ marketing budget. According to the report, retailers are spending nearly 40% of their marketing budget on paid search; and
- Retailers are finding value in social media marketing, but the ROI for driving online sales remains murky. Listening to customers is the most significant objective for social tools according to respondents, with 80% of retailers reporting that they are pursuing social strategies to experiment and learn. And while 28% noted that social marketing has helped grow their business, direct sales from social tactics are not widely measured.
Home goods looking good, for some
The success one retailer has in a given category can oftentimes be an indicator of a rising tide lifting all boats, which is why results last week from Bed Bath & Beyond are of particular interest to Target. The home goods specialist said first-quarter sales for the period ended May 29 increased 13.5% to $1.9 billion and same-store sales increased 8.4%. Earnings per share surged 53% to 52 cents a share.
Target is a major player in the home category, and last year it said the home furnishings and decor category accounted for 19% of total sales of $63.4 billion. As defined by Target, the category includes furniture, lighting, kitchenware, small appliances, home decor, bed and bath, home improvement, automotive and such seasonal merchandise sas patio furniture and holiday decor.
A strong performance by Bed Bath & Beyond is either an indication that the overall category is looking up, despite some significant ongoing difficulties in the housing market, or simply an example of a well-positioned superior operator gaining share from competitors, one of whom is possibly Target. The company has certainly had mixed things to say about the home category during the three month period that overlaps with Bed Bath & Beyond’s first quarter. For example, In May, comps in home were down slightly with a low single digit increase in the decorative home category and softness in housewares. In April, comps were moderately better than the total company decline of 5.9% and were led by a low single digit increase in the decorative home category with the softest performance in seasonal categories. In March, comps in home increased in the mid-to-upper single-digit range with the strongest results in the seasonal categories and weaker performance in housewares.
Former Ace director dies at 89
Gregg Ziegler, the past director and vice chairman of Ace Hardware Corp.’s board of directors, was laid to rest last week. He was 89.
The World War II veteran joined the family business, Ziegler’s Ace Hardware, after graduating from college in 1947. He was the recipient of the 1983 Illinois Retail Merchants Association’s Retailer of the Year. Today, Ziegler’s Ace operates 11 locations in Illinois.
According to his obituary in the Chicago Tribune, Ziegler was also an accomplished driver who set the NASCAR record for the Flying Mile event at Daytona Beach in 1960.