Digital Marketing is the Great Equalizer for Small Retailers

When it comes to competing against the big boys, smaller retailers such as Mom and Pops have a great equalizer: Digital marketing.

According to a recent report, retailers of all sizes are managing the task of getting and maintaining customers in exciting ways. That includes a new age of experimentation through advertising and social media.

Forrester Research, and Bizrate Insights recently came together to publish “State of Retailing Online 2015,” a report that explores the different ways digital retailers are approaching modern marketing and merchandising needs.

On average, businesses put 6 percent of revenue toward online marketing tactics. Large retailers spend about 3 percent and medium retailers spend about 9 percent. That’s equal to about $127 million and $5.9 million.

Social media is ‘a must’

Sucharita Mulpuru, Forrester’s vice president, principal analyst and the study’s lead author, told the National Retail Federation that the online marketplace for small businesses continues to boom, and agrees that social media is a must.

“Smaller merchants need to use tactics like online marketplaces and paid social programs to grow,” Malpuru says.

Dave Kerpen, CEO of Likeable Local, a company that provides marketing services for small businesses, agrees.

“Social media is essential these days to small businesses, because their customers and their prospects are all there,” he tells CNBC’s “On the Money. “Pretty much every consumer at this point is using Facebook, Twitter and LinkedIn, and small businesses have to join that conversation.”

While the online retail marketplace is always changing, many things have remained the same.

“I think the industry is still talking about a lot of the same issues we have been for the last decade: Optimizing email, finding new customers and personalization,” she says. “There are some newer areas like content creation and attribution models which are different.”

Mulpuro also added, “Mobile has also added more complexity to everything.”

According to the NRF, smartphones are accountable for one third of all web traffic, which is why businesses are putting more dollars into paid search and email optimization.

Merchants reported that they would be increasing spending for marketing efforts on smartphones by 58 percent and by 47 percent on tablets. They also said more would continue to be invested into search engine marketing, which have recently taken up the bulk of marketing budgets.

Small retailers: Optimize your site

“It’s a very competitive online environment, but merchants have also been better about optimizing sites for natural search and have improved their organic traffic,” Mulpuru says. “People still are likely to use Google, and companies that have a good natural and paid search effort are the ones that will do best with this. Some companies have very effective search programs, so that is what encourages others to invest in this channel as well.”

Businesses are also putting money into improving the user’s experience once actually at the website. Notably, redesigning “outdated” platforms to ensure that the mobile experience matches the desktop version.

Added content and videos were also cited as a top priority.

Related post: Capturing and Keeping Customers…with Emphasis on Keeping

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