National Jeweler Network

Retail Surveys

What is the best way to acquire customers online?

By Hannah Connorton

July 24, 2014

Los Angeles--Search engine marketing continues to be one of the most effective online customer acquisition tactics, a new study of retailers by the National Retail Federation shows.

Conducted in May and June, the NRF’s State of Retailing online study found that 85 percent of retailers said search engine marketing is one of the most effective customer acquisition tactics, and that retailers spend more of their interactive marketing budgets on paid search programs than on any other customer acquisition tactic.

In addition, four out of five respondents said they are spending more on pay-for-performance search placements this year than they did last year.

To acquire new customers, survey-takers also noted organic traffic (41 percent), affiliate programs (40 percent) and remarketing/retargeting of shoppers in online ads (29 percent) as effective marketing vehicles, all of which they’re also investing in more this year than last.

Remarketing/retargeting is a feature that allows retailers to reach people who have previously visited their website by showing them relevant ads across the Internet, or when they search on Google. The practice also allows a company to show users a tailored message or offer that will encourage them to return to their site, possibly to complete a purchase.

Display ads also are seeing a resurgence, the NRF said, as the method ranked among respondents as the second-highest area of marketing spend behind paid search. Display ads are those that contain eye-catching display or text.

Social and mobile marketing
Social media also is getting increasing attention from retailers, the survey showed.

“Facebook … is proving valuable for customer engagement,” the NRF said, with 62 percent of respondents planning to spend more on interactive marketing efforts on the social media platform this year than last.

“People think of Facebook as a social network, but in reality it’s another medium for personalized display advertising, likely explaining why Facebook has surfaced so high in planned budget spend this year,” said Sucharita Mulpuru, vice president and principal analyst at Forrester Research, which helped conduct the NRF survey.

Half of the retailers surveyed also said they will dedicate more spending on other popular social media sites such as Instagram, YouTube, Pinterest and Twitter in the coming year.

The use of mobile marketing is on the rise as well. The survey found that 42 percent of retailers’ email opens happen on smartphones, up from 28 percent in 2013. Open rates on tablets also rose from 16 to 17 percent.

NRF’s State of Retailing online surveyed 81 retailers in May and June. It was conducted by Shop.org and Forrester Research Inc.