Where Are Retailers Spending Their Advertising Dollars?

This article originally appeared on Marketing Tech Blog. View it here.

It appears that some dramatic shifts are taking place on the retail front as it pertains to advertising. Digital technologies are offering measurable opportunities that are driving greater results – and retailers are taking note. I would not misinterpret these results as thinking it’s traditional versus digital marketing. It’s a matter of sophistication. Advertising on television, for instance, is growing in its ability to target viewers based on region, behavior, and timing.

A performance mindset pervades retail marketers now. We’re seeing the biggest increases in targetable, immediate, online advertising as a result. Randy Cohen, president of Advertiser Perceptions

The digital experience is also enhancing the retail experience, as recently released in InMoment’s 2016 Retail Industry Report. Perhaps some of the advertising expenditures should be shifted to the consumer experience online. Findings include:

  • Consumers spend twice as much in-store when they have been assisted by a staff member
  • Consumer spend 2.2 times more when they visit the brand’s website while at the store
  • Consumer spending increases four times when shoppers are engaged by both staff and a brand’s website. The more assistance a consumer receives, digital or human, the more he or she is willing to spend.

Seeing a decline in email marketing expenses makes me wonder if the costs of email marketing have dropped or the pie of channels has expanded, resulting in flattened budgets being shifted away from email to other channels that require attention. Email marketing is a foundation of any retail or commerce digital strategy, so I hope retailers aren’t actually reducing their email marketing efforts.

One of the more interesting questions, in my opinion, was whether or not a retail outlet should be utilizing a retail specialty agency. The response was overwhelmingly negative. This may actually point to a different issue, the ability of agencies to keep up with technology and consumer trends. Many agencies have launched specializing in big data, social media, mobile experience, omnichannel, and digital media that are pushing the forefront of marketing – beyond the retail industry.


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