Whether it’s a digital-first, direct-to-consumer brand or an established brick and mortar, the ecommerce retail marketing budget holds the key to success.
Ecommerce marketing budgets are expanding across all retail business models, with digital-first, direct-to-consumer (DTC) brands loosening the purse strings at considerably higher rates, according to a recent research report, “How Leading Retailers and Direct-to-Consumer Brands Are Investing in Digital,” released by Oracle in partnership with CommerceNext. However, despite all that investment, marketers aren’t completely satisfied with the results. Such disappointment has led to a refocus on engaging new customers and creating a better experience for all.
And the survey says…
Oracle’s research found that 51% of marketers were least satisfied with their investment in personalization. Traditional and DTC brands point to acquisition marketing, in combination with personalization and gaining a unified view of the customer, as mission-critical. To enable personalization and customer satisfaction—and acquire customers—more marketing dollars are being apportioned to investments in artificial intelligence and customer data platforms.
Last year, 81% of ecommerce marketers surveyed for the Oracle study said that acquisition marketing was their top priority. More than half (53%) said acquisition marketing met expectations in 2018; 24% said it exceeded expectations. Happy with the results of those investments, marketers are spending even more on customer acquisition in 2019; however, they may be doing it differently than in the recent past.
Previously, marketers weren’t diversifying efforts through various channels. Today, a marketer might take dollars from a marketing budget and invest outside of the walled gardens of Facebook and Instagram. According to the research, podcasts, over-the-top television or streaming services, and even billboards have been successful. Digital-first DTC brands have focused more budget dollars on acquisition than their traditional counterparts, but both concentrate on attracting new customers as a reliable way of increasing online sales. The challenge is in reinventing the ways to acquire new customers.
For the 2019 holiday season, brands are boosting their technology spend and investing in artificial intelligence (AI) to enable personalization, according to the report. Digital native brands will spend more than their traditional retail competitors, with many implementing AI or machine learning for automated customer service, including chatbots. DTC brands plan to increase marketing spending for AI by 56%, compared with 41% of incumbent brands. The study also reports that personalization is slated to increase by 56% of DTC brands vs. 50% of traditional brands.
Customer data platforms
Most marketers are not yet satisfied with their efforts to create a single view of the customer to personalize the customer experience. This year, according to the report, the top innovation investment priority for all ecommerce marketers is in customer data platforms CDPs). CDPs provide a unique, unified view into customer desires. The software aggregates and organizes customer data across a number of touchpoints and collects and structures real-time data into individual customer profiles. 65% of respondents have increased budget in 2019 on CDPs, and 52% are investing more in personalization technology.
When it comes to carving up a marketing budget, successful brands form plans that will help them learn about existing customers and use that knowledge to acquire new ones and foster loyalty. Technology such as AI and CDPs help retailers create in-depth customer portraits, which assist them in meeting their goals.