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Poor marketing to blame for eCommerce business failures

The majority of eCommerce startups are set to fail within their first 120 days of operation, with marketing deficiencies among the most common causes, new research has revealed.

A survey of 1,253 owners of failed startups in the UK, carried out by Marketingsignals.com, revealed the top ten reasons why e-commerce start-up businesses are failing.

According to sources (including Forbes and Huff Post), 90% of e-commerce startup businesses end in failure within the first 120 days. The Marketingsignals research found that the two main reasons for failure are poor online marketing performance coupled with an overall lack of search engine visibility.

Of those companies who were surveyed, a staggering 37% said that their failure could be attributed to an inability to compete or deliver online marketing, with 35% saying a lack of online visibility was the main factor.

Further research found that the same proportion of respondents (35%) felt failure was down to them being too small to compete or there being no market for their products/services, whilst 32% reported that it was due to them running out of cash.

Completing the top five reasons for failure were price and costing issues, with 29% of failed startup owners claiming this was the reason why they folded.

When further quizzed on the reasons why their online startup business failed, 23% said that it was due to being outcompeted, whilst 19% blamed retail giants such as Amazon for dominating a large share of the consumer online retail market.

16% felt that their business collapsed due to their lack of customer service, whilst 14% felt it was due to the poor team they’d built around themselves.

Completing the top ten reasons why e-commerce startups fail was product mistiming, with 11% of startup owners claiming that the reason why their business failed was due to ‘right product, wrong time’.

Gareth Hoyle, managing director at Marketingsignals, said: “It’s clear to see that having an online presence and being visible on search engines is a key area e-commerce startups need to focus on to ensure they succeed.

“As nine in ten online startups fail within their first 120 days of businesses, it’s incredibly important that business owners put provisions firmly in place well before launching – this must include a bulletproof search visibility and online marketing strategy, as well as ensuring there is a market for their product offering.

“A targeted, strategic approach to digital marketing is vital to the success of any online business in this day and age, only more so for small businesses who are just starting out. Many tools can be used to increase their brand awareness and search visibility in their first few days and weeks, where consumer trust and loyalty hasn’t yet been established.”

The top ten reasons why e-commerce startups end in failure:

  1. Poor online marketing – 37%
  1. Lack of online search visibility – 35%
  1. Little to no market for their products or services – 35%
  1. Running out of cash – 32%
  1. Price and costing issues – 29%
  1. Got outcompeted – 23%
  1. Retail giants dominating a large share of the market – 19%
  1. Lack customer service – 16%
  1. Poor team around them – 14%
  1. Product mistiming – 11%

Image by StockSnap from Pixabay

IPA Bellwether: UK marketing budgets flat-line

Hopes of a sustained revival were extinguished in the second quarter of 2019 as firms reported no change to available marketing budget expenditure amid growing political and economic uncertainty.

Following a return to growth in the opening quarter of the year, buoyed by firms taking a more pro-active approach to offset risks to their businesses, latest Bellwether data signalled a stalling of growth, with the net balance falling from +8.7% to +0.0%.

The 20% of panel members reporting greater marketing spend was completely offset by those cutting expenditure, while the remaining 60% kept budgets unchanged since Q1.

Growing economic uncertainty, continued ambiguity over Brexit and additional risk through a change of political leadership in the UK were mentioned by firms as factors expected to challenge the business environment over the coming year.

This created hesitancy among clients and delayed decision making. Panel members also raised concerns that difficult conditions domestically were damaging consumer confidence and impacting consumption.

Businesses were also wary of headwinds from external sources, particularly spillover effects into UK markets from global trade disputes and weaker growth at key export destinations such as Europe and Asia.

Nevertheless, marketing executives were given extra discretion over internet-based advertising in the second quarter, as signalled by a net balance of +11.5% of firms reporting budget growth (+17.2% in Q1). Within internet, search/SEO budgets also grew solidly (net balance of +9.9% from +14.2%).

Main media advertising budgets were also given a boost in the second quarter, as some firms used big ticket marketing campaigns to build brand recognition and expand customer bases. There were also suggestions that marketing was being deployed as a defensive strategy due to increased competitive pressures. Overall, a net balance of +5.6% of companies reported greater main media marketing budgets (+5.2% in Q1).

The only other Bellwether category to register growth in the second quarter was events. The net balance increased to +4.8%, from +3.4% previously, its highest since the first quarter of 2018 and corroborating with forecasts made earlier in the year that events budgets would grow over the 2019/20 financial year.

Meanwhile, available market research spend was reduced for a sixteenth successive quarter (net balance of -2.9% from -4.2%), while PR budgets were also cut (net balance of -5.2% from +0.0%). A second successive downward revision to sales promotion budgets was also recorded (-7.1% from -3.7%). Aside from the ‘other’ advertising category (net balance of -12.8% from -5.4%), it was direct marketing which was the worst performer, with the net balance falling to -9.0% (-3.5% previously), the lowest level in over ten years.

Panel members remained negative regarding financial prospects in the second quarter, casting more downbeat assessments towards both industry-wide and company-own finances than seen during the opening quarter of 2019.

With precisely 34% of marketing executives reporting a pessimistic outlook towards finances in their industry, compared to approximately 8% that were optimistic, the resulting net balance (-25.6%) signalled the second-most negative assessment since the fourth quarter of 2011 (surpassed only by the Q4 2018 reading of -28.6%). Furthermore, this was down from a net balance of -22.6% seen in Q1.

Latest data also pointed to deeper negativity towards own-company financial prospects. The net balance fell to -9.8%, from -2.7% in the first quarter, signalling the highest degree of pessimism since Q4 2011.

Bellwether remains cautious towards 2019, expecting only a modest 1.1% annual increase in adspend over the year as a whole. Various factors underpin its reservation, namely ongoing Brexit uncertainty, but also recent developments in the UK economy, which this year so far have largely been negative. It cites there is a real possibility that the UK economy will contract in the second quarter, and the Bellwether panel comments, as well as latest Bellwether data, highlight that businesses are looking to contain costs and shield against challenging demand conditions.

Nevertheless, Bellwether believes businesses will be eager to accelerate marketing efforts once uncertainty has cleared, and subsequently see 2020 onwards being more positive on the adspend front. It expects growth of 1.8% in 2020, followed by stronger rates of increase in 2021 (2.0%), 2022 (2.2%) and 2023 (3.1%).

Image by rawpixel from Pixabay

Brits falling victim to fraud via social media

Social media could be responsible for an increasing number of young Brits falling victim to fraud, new research has revealed.

Data shows that 47 per cent of payment scams in the last year were among under 30s, with over half (52 per cent) believing they have been approached by scammers on social media.

A massive 85 per cent have shared details on Instagram that could leave them open to ID theft, and a shocking six per cent say they would allow someone remote access to their bank account.

A further four in ten also say they would provide personal and security detail to somebody phoning up claiming to be from their bank.

In a bid to educate young Brits about scams and fraud Santander has teamed up with Kurupt FM from BAFTA-winning BBC TV show People Just Do Nothing to launch its latest fraud awareness campaign, ‘MC Grindah’s Deadliest Dupes’.

The three episode mini-series follows MC Grindah as he goes undercover to investigate the murky underbelly of scams and fraud and has been created to grab the attention of younger audiences online.

They will feature identity theft, online scams and money laundering as the focal topics, and are set to run across Instagram, Snapchat and YouTube to capture the key audience.

Susan Allen, Head of Retail & Business Banking, Santander UK, said: “We’re committed to fighting financial crime and work hard to raise awareness of fraud and scams with all age groups.

“We recognised that to engage younger audiences with these important messages, we needed to do something different and memorable.

“We hope that everyone, no matter what age, will enjoy Deadliest Dupes and learn how to stay safe so they Don’t Get Kurupted.”

Deadliest Dupes follows previous fraud awareness campaigns run by Santander including its Phish & Chips van which toured the UK handing out free fish and chips and a side portion of advice on avoiding scams.

A Scam Avoidance School introduced in branches in 2018 has been attended by over 100,000 people to date.

A new online hub has been set up to support the campaign.

Those at risk can find out more about the tricks used by online fraudsters and test their own ‘scam smarts’ with a specially designed quiz.

Retailers failing at simple eCommerce best practice

Online retailers could be making more in revenues if they applied simple measures, such as appropriate product imagery.

That’s according to research carried out on 1,213 UK adults by agency MarketingSignals, which found a staggering 61 percent of those polled were put off purchasing from a website by insufficient or poor product imagery, followed by 57 percent that found product descriptions inadequate.

The survey also found that more than half (52 percent) of these businesses are failing potential customers with their lack of customer service, while 47 percent have overly intrusive discount pop ups on the home page, which can potentially detract users from making a purchase.

43 percent of those polled were put off by websites that has an over complicated checkout process, while 41 percent would be deterred by an e-commerce business which has little or no social media presence.

A third (34 percent) of those questioned said that a lack of delivery options would deter them from from making an online purchase, whilst a website that wasn’t optimised for mobile devices would put off 27 percent of respondents.

16 percent said they’d be put off from making a purchase if they couldn’t see company information or an ‘about us’ page. Completing the top ten reasons which deter users from making a purchase was customers who prefer to use alternative payment methods, with over one in ten (11 percent) saying that they’d seek to make their purchase elsewhere if a website did not accept the PayPal or Apple Pay.

Gareth Hoyle, managing director at marketingsignals.com, said: “It’s clear from the research that many potential customers are being put off from making a purchase from websites they are not familiar with, which makes it so much more important for e-commerce businesses to make the checkout process as simple as possible in order for them to complete their transaction smoothly.

“In this social media age, it’s perhaps unsurprising that 41 percent of Brits would be put off from making a purchase from a website that is unfamiliar to them and doesn’t have a visible social media presence.

“Internet savvy consumers are always keen to spot a bargain, though can be put off by over complicated or seemingly untrustworthy websites when attempting to make a purchase, instead opting to buy from a site they already know and trust. So what this research demonstrates is that it’s clear that there are simple steps e-commerce businesses can take in order to improve conversion rates from first time visitors to their site.”

The top ten reasons that deter customers from making an e-commerce purchase:

  1. Insufficient or poor quality product imagery – 61 percent
  2. Inadequate product descriptions – 57 percent
  3. Lack of customer service – 52 percent
  4. Distracting/Intrusive pop ups – 47 percent
  5. Over complicated check-out process – 43 percent
  6. Little or no social media presence – 41 percent
  7. Lack of delivery options – 34 percent
  8. Desktop-only site design – 27 percent
  9. Insufficient or lack of company information – 16 percent
  10. Not accepting alternative payment methods including PayPal and Apple Pay – 11 percent

Image by StockSnap from Pixabay

Retailers urged to embrace digital personalisation

Retails have been urged to extend personalisation at every digital touchpoint and to every individual using AI, in light of more dire warnings on the state of the High Street.

The British Retail Consortium and KPMG have noted the lowest sales figures since 1995 in May, which in a year plagued with closures and CVAs raises the alarm for further decline in the UK high street in the coming months.

According to Raj Badarinath, VP Ecosystems at RichRelevance, brands and retailers are desperately looking for a solution, but stubbornly ignoring the most critical factor: what customers want.

Badarinath asserts that instead of exploring their customers as individuals (not rough marketing-made segments) they keep holding on to outdated personalisation tactics that are clearly not good enough.

“It is disappointing to see retail sales falling year on year in the UK. It’s a tricky time for UK retailers – as they battle on multiple fronts: monopolies like Amazon, ankle biters such as DVNBs (Digitally Native Vertical Brands) and more,” said Badarinath.

“UK consumers today are short on time and inundated with the problem of choice – too much content, product, offers and more. Retailers should reduce decision fatigue by extending personalization at every digital touchpoint and to every individual using AI, which provides the technical ability to do so for the first time. Retailers realize that the UK consumer is fickle and easily wooed, so techniques like hyper-personalization ensure a seamless, memorable customer experience, to increase repeat sales and improve overall lifetime value.”

UK ad spend to hit £21.8 billion in 2019, but growth slows

Advertising is on the up, with UK spend expected to increase to £21.8 billion, up from £20.5 billion in 2018.

That’s according to the latest forecasts by media investment group, GroupM, which predict 6.1 percent growth for 2019, down from 7.8 percent in 2018, with this year aided by decent underlying growth, admittedly with a slight decline.

Brexit still occupies management bandwidth, which in turn affects ad-budget setting with the potential to lead to reductions.

Digital advertising continues to grow at around 11 percent for 2019, accounting for more than 60 percent of total UK advertising, of which over half is search.

Digital media ‘pure plays’ represent the largest group of ad sellers, with Facebook and Google accounting for around three-quarters of the figure on a gross basis.

After hitting £4.5billion, television accounts for around 20 percent of media investment and remains a stable medium in terms of advertising, with spending left unchanged in 2018 over 2017, with levels set to remain for a 24 month period.

Radio also appears set to hold on to its revenue base this year, followed by closer to +2 percent growth next year, along with Out-of-Home (OOH), digital formats which are becoming increasingly important, accounting for half of spending in OOH during 2018, with further share gains still to come especially as more automation takes root, including the emergence of performance-based targeting and data-driven trading. For now, GroupM forecasts growth exceeding +3 percent in each of 2019 and 2020.

The losers in the advertising game continue to be print, with newspapers and magazines now accounting for less than 10 percent of media investment combined in 2019, down from more than 50 percent in a 15-year period.

Image by Falkenpost from Pixabay

SME GDPR compliance only ‘skin-deep’

72% of UK SMEs report being ‘very aware’ of GDPR and its requirements, but 60% say that the recent changes to data protection have had a ‘slight’ or ‘no’ impact on their business, while 8% do not know.

The figures, from a survey commissioned by Shred-it, have revealed a positive understanding and engagement with the principles of GDPR among SMEs on its first anniversary, but also highlight a possible cosmetic understanding and key areas of concern around the more complex aspects of full compliance.

The independent survey of 1439 SMEs comprised a series of unprompted questions and covered a range of businesses in specific market sectors across the United Kingdom with 85% having 10 to 49 employees.

When asked about GDPR readiness nine in ten rated themselves as a ‘4’ or ‘5’ out of 5; the main actions taken were reviewing policies (45%) and emailing customers for consent (35%). These are considered to be the lighter ‘front end’ aspects of GDPR compliance according to Shred-it’s experts.

The survey data showed that one third (32%) of SMEs reported that GDPR has had a ‘great’ or ‘considerable’ impact on their business. When those businesses that had experienced challenges with GDPR compliance were probed further, they cited data breaches and disclosure requirements as the main challenges, with healthcare (27%) and real estate (25%) the main industries affected with those specific areas. Small proportions also reported issues with subject access requests, again with healthcare (28%) and real estate (15%) being the main industries affected.

Ian Osborne, Vice President UK & Ireland for Shred-it, said: “On the surface it is good news. It is clear that many feel they are already compliant with GDPR having reviewed areas such as ‘consent’ activities and publishing a privacy notice. These typically deal with the ‘front end’ aspects of GDPR. However, while many say they are ready, there is a real question mark over the extent to which the majority of SMEs are prepared to respond to a data breach or how to react to a subject access request, for example. Our survey suggests that there is still a need for a large education exercise to show SMEs what is really involved in GDPR compliance at depth.”

Of the 10% that said they were ‘not quite’ or ‘not at all’ ready, who rated themselves as a ‘1’ to ‘3’ out of 5, 42% (54 businesses) said they have not been dealing with it; when asked what was holding them back, their unprompted reasons were that data protection authorities were ‘only interested in bigger companies’, it was ‘not applicable to us’, it was ‘too complicated’, and they were ‘too busy’. Of the 10%, two in five would only trust someone in-house to help them comply with GDPR – only one in ten would consider external support and only 4% would trust the data protection authority for assistance. The SMEs that would consider external support were unsure what services they needed and when they would intend to look for support.

In the twelve months between 25th May 2018 and 2019 the Information Commissioner’s Office (ICO), the UK’s independent authority set up to uphold information rights in the public interest, has taken 59 enforcement actions.

Osborne added: “Our survey seems to show two clear pictures emerging. One is where the majority of SMEs are genuinely engaged with the process of compliance; within that group there are many who believe they are already compliant but may have missed some key more complex parts of the GDPR. It is the minority in that group who have recognised its greater challenges and are wrestling with its more complex areas. The other is one where some SMEs recognise they are not ready, seem unwilling to address the issue of GDPR compliance and are reluctant to seek support in any form to help them. When the relevant authority’s fines become more common headlines across the UK, we expect that views may change about what compliance really means.”

Retailers ‘neglecting Twitter and Facebook for customer service’

Retailers are neglecting social media when it comes to customer service, and are not listening to consumers to drive customer experience improvements.

That’s according to the 2019 Eptica Digital Trust Study, which found that while retailers successfully answered 59% of routine queries asked via web self service, chat, email, Facebook and Twitter, there were wide variations in performance between channels.

Retailers provided answers to 83% of queries on their websites but only responded correctly to 38% of tweets and 50% of Facebook messages. Performance had worsened on many channels since 2017 – then retailers answered 73% of emails.

By 2019 this had dropped to 68%, despite the continued popularity of the channel with consumers, who use it for over a quarter of their interactions with brands.

As part of the study, 20 fashion and food & drink retailers were evaluated on their digital customer experience, alongside brands from other sectors, by testing their accuracy and speed at answering relevant, routine queries, repeating research conducted since 2012. Questions included asking about ethical sourcing policies (fashion) and allergy labelling (food and drink).

Additionally, 1,000 consumers were asked for their views on customer experience.

Fashion (answering 60% of all queries) and food and drink (59%) were the top sectors surveyed but still failed to respond to 4 in 10 of all routine queries.

The research also demonstrated a direct link between trust, listening and loyalty. 89% of consumers surveyed said they either will stop buying from brands that they don’t trust or will spend less. Building trust begins with delivering on basic promises – 59% ranked giving satisfactory, consistent answers as a top three factor in creating trustworthiness, while 63% rated making processes easy and seamless as key. Just 8% of consumers felt that brands were listening to them all of the time, with 74% believing brands pay attention to their views half the time or less.

“The move to digital has transformed the retail landscape,” said Olivier Njamfa, CEO and Co-Founder, Eptica. “Greater choice means consumers are becoming more demanding and are actively seeking out brands that they can trust and who listen to them. While retail brands have made some improvements since 2017, they have slipped back in others, damaging trust and ultimately customer loyalty and revenues. If they want to succeed they need to listen to customers and use their insight. Only those who do this will thrive and stay ahead of the competition.”

Retail Accuracy 2019
versus 2017
Average speed 2019
versus 2017
Web 83% vs 70% n/a
Email 68% vs 73% 10hr 19m vs 24hr 12m
Facebook 50% vs 28% 43m 24s vs 3hr 34m
Twitter 38% vs 50% 1hr 56m vs 1hr 43m
Chat 35% vs 25% 8m 43s 4m 24s
Total 59% vs 55%

Speed of response also varied widely between channels – and even within sectors and brands. One fashion retailer answered a tweet in 17 minutes, yet another took 50 hours to reply. A food and drink retailer responded on Facebook within one minute but needed nearly 23 hours to provide an answer on email. Overall response times on chat doubled from 4 minutes back in 2017 to 8 minutes this year. Facebook had the fastest average speed of response, at 43 minutes, 24 seconds – over twice as fast as Twitter (1 hour 56 minutes) and nearly 15 times faster than email (10 hours 19 minutes). This is despite exactly the same questions being asked across these channels.

The study evaluated 50 UK brands, split equally between the fashion, food and drink, travel, insurance and banking sectors. Brands were rated on their ability to answer five routine questions via their websites, as well as their speed, accuracy and consistency when responding to email, Twitter, Facebook and chat. Additionally, 1,000 UK consumers were surveyed on their attitude to trust, its relationship with customer experience and on loyalty and brand reputation. All research was completed in H1 2019.

A full report, including the study results, graphics and best practice recommendations for brands to transform customer experience is available at https://www.eptica.com/19cxretail.

An infographic on the results is available at https://www.eptica.com/state-uk-retail-customer-experience-infographic-2019.

Marketing spend set to remain stable in 2019

80% of businesses plan to spend more or the same on PR in 2019 compared with 2018.

The findings are found in a new report, ‘Spotlight on Marketing,’ commissioned by marketing communications agency Voiceboxx.

100 communications professionals were asked a series of questions at the beginning of 2019 to help understand the nature of the marketing landscape for the year ahead, taking into consideration GDPR regulations and Brexit.

Out of those polled, 80% said that their budget for creative/branding would increase or stay the same for 2019, with creative design essential to direct mail, which all respondents were planning to invest in through 2019.

Digital tactics were also high on the agenda for marketeers, with 87% of businesses using video as a tool and the platform being the marketing tactic most respondents would like to utlise in 2019.

Other key points from the report revealed:

• 43% of respondents said their website needed improving in 2019
• 47% plan to spend more on their website in 2019, than they did in 2018
• Over half respondents said keeping up to date with social media trends was a challenge
• Most marketeers plan to invest more in strategy in 2019, than 2018
• 30% of respondents see new CRM system and staff training as essential for 2019
• 57% of businesses want to use social media advertising in 2019

Overall, the survey found that respondents saw 2019 as a year for improving communications across all channels, with analysis revealing marketeers already use a wide range of tactics, with new activity areas for 2019 being low priorities.

GUEST BLOG: Gauging the return on investment available from marketing

According to figures published by Google in its Car Purchasing UK Report in April 2018, £115.9 million was invested in direct mail and online display by UK car dealers during 2016 alone.

While automotive manufacturers often have a substantial marketing budget available to them though, this is not always a luxury to firms when they are looking at their marketing campaigns.

Due to digital visibility not usually coming cheap due to the increased interest in online platforms, VW service providers Vindis takes a look at whether such investments are indeed worth the cost…

The automotive industry

Within Google’s Drive To Decide Report, which was created in association with TNS, a discussion took place about how the auto shopper of today is more digitally savvy than previous generations. In fact, over 82% of the UK population aged 18 and over have access to the internet for personal reasons, 85% use smartphones and 65% choose a smartphone as their preferred device to access the internet. These figures show that for car dealers to keep their head in the game, a digital transition is vital.

Research online will also be carried out by 90% of auto shoppers, the same report goes on to reveal. 51% of buyers starting their auto research online, with 41% of those using a search engine. To capture those shoppers beginning their research online, car dealers must think in terms of the customer’s micro moments of influence, which could include online display ads – one marketing method that currently occupies a significant proportion of car dealers’ marketing budgets.

Of the entire UK Digital Ad Spending Growth throughout 2017, eMarketer claims that the automotive industry accounted for 11% of the total. This placed the industry in second place behind the retail sector. The automotive industry is forecast to see a further 9.5% increase in ad spending in 2018.

As many car purchases still occur on the forecourt though, what effect is online having on influencing the decisions of auto shoppers? 41% of shoppers who research online find their smartphone research ‘very valuable’. 60% said they were influenced by what they saw in the media, of which 22% were influenced by marketing promotions – proving online investment is working.

Across the automotive sector, traditional methods of TV and radio continue to be the most invested forms of marketing. In the last past five years though, it is digital that has made the biggest jump from fifth most popular method to third, seeing an increase of 10.6% in expenditure.

The healthcare industry

An entirely different set of rules are followed for marketing when it comes to the healthcare sector. This is generally because it is restricted by heavy regulations. The same ROI methods that have been adopted by other sectors simply don’t work for the healthcare market. Despite nearly 74% of all healthcare marketing emails remaining unopened, you’ll be surprised to learn that email marketing is essential for the healthcare industry’s marketing strategy.

Email is used by approximately 2.5 million people as a primary form of communication. The use of email has also increased in value and usage over the past few years. This means email marketing is targeting a large audience. For this reason, 62% of physicians and other healthcare providers prefer communication via email – and now that smartphone devices allow users to check their emails on their device, email marketing puts companies at the fingertips of their audience.

Those in the healthcare industry should see online marketing as another platform that will make for worthwhile investment as well. This is especially the case when you consider that one in 20 Google searches are for health-related content. This could be attributed to the fact that many people turn to a search engine for medical answer before calling the GP.

According to data from the Pew Research Center, a search engine will be the starting point of 77% of all health enquiries. What’s more, 72% of total internet users say they’ve looked online for health information within the past year. Furthermore, 52% of smartphone users have used their device to look up the medical information they require. Statistics estimate that marketing spend for online marketing accounts for 35% of the overall budget.

Don’t forget the appeal of social media marketing either. Whilst the healthcare industry is restricted to how they market their services and products, that doesn’t mean social media should be neglected. In fact, an effective social media campaign could be a crucial investment for organisations, with 41% of people choosing a healthcare provider based on their social media reputation! And the reason? The success of social campaigns is usually attributed to the fact audiences can engage with the content on familiar platforms.

The fashion industry

The success of many fashion retailers will depend on their investment online. This point is underlined by the fact online sales in the fashion industry reached £16.2 billion in 2017! This figure is expected to continue to grow by a huge 79% by 2022. So where are fashion retailers investing their marketing budgets? Has online marketing become a priority?

Almost a quarter of all purchases in December 2017 were tied to ecommerce. This is according to the British Retail Consortium, as online brands such as ASOS and Boohoo continue to embrace the online shopping phenomenon. ASOS experienced an 18% UK sales growth in the final four months of 2017, whilst Boohoo saw a 31% increase in sales throughout the same period.

Next, Marks and Spencer, and John Lewis are just three of the well-known brands in the industry to have invested millions into their operations and marketing efforts online. Such tactics aimed to capture the online shopper and drive digital sales. John Lewis announced that 40% of its Christmas sales came from online shoppers, and whilst Next struggled to keep up with the sales growth of its competitors, it has announced it will invest £10 million into its online marketing and operations.

It also seems that many shoppers aren’t willing or interested to head to the high-street in order to shop. Instead, they like the idea of being able to conveniently shop from the comfort of their home, or via their smartphone devices whilst on the move.

In research carried out by the PMYB Influencer Marketing Agency, 59% of fashion marketers increased the budget they had available for influencer marketing last year. In fact, 75% of global fashion brands collaborate with social media influencers as part of their marketing strategy and more than a third of marketers believe influencer marketing to be more successful than traditional methods of advertising in 2017 – as 22% of customers are said to be acquired through influencer marketing.

The utilities industry

Comparison websites are now being used by so many consumers when they are trying to find the right utilities supplier for their needs. These websites could be the key to many suppliers acquiring and retaining customers.

Comparison websites often spend millions on TV marketing campaigns, which are then watched by so much of the nation. Therefore, it has become vital for many utility suppliers to be listed on comparison websites and offer a very competitive price, in order to stay in the game.

Compare the Market, MoneySupermarket, Go Compare and Confused.com are currently the four largest comparison websites. These companies are also among the top 100 highest spending advertisers in the UK, but does that marketing investment reflect on utility suppliers?

The difference between a high rate of customer retention for one supplier and a high rate of customer acquisition for another supplier can be determined through comparison websites. If you don’t beat your competitors, then what is to stop your existing and potential new customers choosing your competitors over you?

Instead of customer acquisition, British Gas has altered its marketing goals towards customer retention. Whilst the company recognise that this approach to marketing will be a slower process to yield measurable results, they firmly believe that retention will in turn lead to acquisition. The Gas company hope that by marketing a wider range of tailored products and services to their existing customers, they will be able to improve customer retention.

A loyalty scheme offering discounted energy and services has received a £100 million investment. This scheme focuses on the value of a customer, their behaviour and spending habits over time to discover what they are looking for in the company. The utilities sector is incredibly competitive, so it is vital that companies invest in their existing customers before looking for new customers.

Digital should be a key focus for those in the utilities sector too. 40% of all searches in Q3 2017 were carried out on mobile, and a further 45% of all ad impressions were via mobile too – according to Google’s Public Utilities Report in December 2017. As mobile usage continues to soar, companies need to consider content created specifically for mobile users as they account for a large proportion of the market now.

Concluding thoughts

Online marketing investment should be seen as very important for some industries, such as the fashion and automotive sectors. With a clear increase in online demand in both sectors that is changing the purchase process, some game players could find themselves out of the game before it has even begun if they neglect digital.

The picture grows even more for sectors such as the utilities industry. Whilst TV and digital appear to remain the main sales driving forces, it’s more than just creating your own marketing campaign when comparison sites need to be considered. Without the correct marketing, advertising or listing on comparison sites, you could fall behind.

The average firm is expected to allocate a minimum of 41% of their marketing budget to online strategies during 2018. This is according to webstrategies.com, with this figure expected to grow to 45% by 2020 too. Social media advertising investments is expected to represent 25% of total online spending and search engine banner ads are also expected to grow significantly too – all presumably as a result of more mobile and online usage.

Where do you stand when it comes to investment into marketing strategies? If mobile and online usage continues to grow year on year at the rate it has done in the past few years, we forecast the investment to be not only worthwhile but essential.

Sources

https://pmyb.co.uk/global-fashion-company-influencer-marketing-budget/

https://www.prnewswire.com/news-releases/the-uk-clothing-market-2017-2022-300483862.html

http://uk.fashionnetwork.com/news/Online-is-key-focus-for-UK-fashion-retail-investment-in-2017,783787.html#.WrOjxOjFKUk

http://www.mobyaffiliates.com/blog/retail-accounts-for-14-2-of-digital-advertising-spending-in-the-uk-in-2017/

http://www.thisismoney.co.uk/money/bills/article-2933401/Energy-price-comparison-sites-spend-110m-annoying-adverts.html

http://www.thedrum.com/news/2017/03/28/british-gas-shifts-acquisition-retention-marketing-know-the-value-keeping-the-right

https://www.independent.co.uk/news/business/news/uk-companies-online-advertising-spend-10-billion-more-last-year-2016-pwc-a7678536.html

https://www.webstrategiesinc.com/blog/how-much-budget-for-online-marketing-in-2014

https://www.kunocreative.com/blog/healthcare-email-marketing

http://www.evariant.com/blog/10-campaign-best-practices-for-healthcare-marketers

https://getreferralmd.com/2015/02/7-medical-marketing-and-dental-media-strategies-that-really-work/