Retail “laggards” believe their marketing departments are not spending sufficient time acquiring new customers, according to a benchmark study conducted by Retail Systems Research (RSR). Moreover, 69% of executives from this group indicated that they do not spend enough time building and maintaining customer loyalty.
For the report, titled: Retail Marketing 2013: Organizational Drift, RSR surveyed 122 retail personnel including executives, middle managers and store associates to understand how retailers are handling the growing importance of marketing in the industry. Although retailers are taking the right steps to adapt, many are not well-positioned to deliver on customer expectations, according to survey results.
In 2013, 61% of retailers said retaining customers and building customer loyalty has become more challenging, a significant increase from 51% in 2012. But retailers, overall, have increased budgets to combat these challenges: the amount of respondents who had decreased marketing budgets dropped from 47% to 30%.
Owning The Customer Experience
As retailers focus more on their marketing efforts, they have established a clearer picture of who should be in control of the customer experience. Nearly half (43%) of retailers said chief marketing executives ran the customer experience, compared to 28% in 2012. More importantly, the number of respondents who identified there was “no explicit owner” of the customer experience dropped from 35% to 19% between 2012 and 2013.
Retailers also realize that they need to focus more on the customer experience than price and product to differentiate the brand. In fact, the top three marketing opportunities for retailers included:
- Developing more effective targeting by capturing more detailed customer preferences (53%);
- Focusing more on customer experience and less on product (48%); and
- Using digital channels to drive traffic to stores (44%).
Focusing On New Technology
With greater attention to marketing comes an increased focus on investing in and implementing marketing technology. Across the board, retailers said they saw solutions such as customer purchase analytics (72%), retargeting offers (60%), CRM software (59%) and digital marketing platforms (50%) as valuable investments. However, companies that value technology still outnumber those that have implemented it by a ratio of approximately 2:1.
To conclude the report, RSR provided retailers with four final recommendations:
- Focus less on retaining existing customers, and more on acquiring new ones;
- Test and experiment with different tactics, even if they may not work;
- Consolidate marketing by absorbing e-Commerce capabilities and the right people; don’t just take responsibilities from other departments; and
- Evaluate solutions by the quality of vendors.
Click here to access the report, titled Retail Marketing 2013: Organizational Drift.