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Gordon Porter
Bliss Integrated Communication
(212) 221-4521
Gordon@BlissIntegrated.com

Monday, December 2, 2013
RETAILERS TINKER WITH DIGITAL STRATEGIES FOR HOLIDAYS, BDO USA SURVEY FINDS
MARKETING BUDGETS LEVEL OFF AMIDST MODEST SALES OUTLOOK

CHICAGO – Following tepid sales projections for the upcoming holiday shopping season, retail marketers aren’t planning to significantly adjust their spending compared to last year. A recent BDO USA, LLP survey found that 72 percent of chief marketing officers at leading U.S. retailers plan to allocate roughly the same amount of funds toward marketing and advertising this year as they did in 2012. Although 20 percent plan to increase their expenditures, retailers anticipate a one percent decline in their advertising budgets overall.

Following a six-year trend, social media continues its rise as an essential element in the holiday marketing playbook. The 88 percent of retailers leveraging social media this season indicate that the tactic will comprise 14 percent of their total marketing budget, on average, up from 10 percent in 2012. However, despite the growing prominence of social media and other forms of e-commerce, including mobile, retailers remain uncertain about the optimal mix of digital marketing strategies.

“Retailers know they must embrace multiple channels to stay competitive this holiday season,” says Natalie Kotlyar, partner in the Retail and Consumer Products practice at BDO . “But the truth is, many brands are playing catch up with the digital movement. Consumers have come to expect social engagement; mobile is now the challenging frontier for many brands seeking to test the waters more before making a major investment during such a critical season.”

These findings are from the most recent edition of the BDO Retail Compass Survey of CMOs, which examined the opinions of 100 chief marketing officers at leading retailers located throughout the country. The retailers in the study were among the largest in the country, including 11 retailers in the top 100 based on annual sales revenue. The telephone survey was conducted in September and October of 2013.

Additional findings of the 2013 BDO Retail Compass Survey of CMOs include:

Traditional channels still important amid mixed approach to mobile. While 38 percent of retailers are including mobile in their marketing strategy this year—down from 50 percent in 2012—those who are embracing it are ramping up their efforts. Last year, mobile comprised an average of 5.9 percent of retailers’ overall marketing budget; this year, that number has jumped to 15 percent. With eMarketer predicting a 15 percent rise in mobile shopping volume this year, the mixed survey results suggest that retailers remain divided as to the platform’s growth potential and its ability to convert sales. One strategy on which retailers are not divided, however, is print advertising: a plurality of CMOs (41 percent) are investing most of their holiday budgets in traditional print ads, which have been a consistently popular medium over the last 4 years. And CMOs still believe in the power of TV to reach a wide audience: 29 percent say they will spend the majority of their holiday advertising budget on broadcast.

Big data still an enticing challenge for retailers. With new advances in technology, such as customer face-scanning and in-store body heat mapping, retailers are accumulating a growing trove of digital and in-store shopping behavior data. Nearly nine-in-ten CMOs surveyed say that they find it challenging to integrate and manage the massive amount of data available to them, down only slightly from 93 percent in 2012. Among the top big data obstacles facing retailers are the ability to use data effectively for marketing efforts (44 percent) and organizing data and developing metrics (22 percent). To meet these challenges and capitalize on opportunities, major retailers like Wal-Mart and Apple have adopted new, cutting-edge data mining systems, which help contextualize data over time and make it easier to forecast trends.

Facebook and Twitter dominate, with Pinterest on the rise. Among the 88 percent of retailers who are incorporating social media into their marketing strategy this holiday season, Facebook (99 percent) and Twitter (52 percent) remain the two most popular platforms. Marketers are also increasingly using Pinterest (27 percent) and YouTube (24 percent) to engage customers and drive traffic to their e-commerce platforms. Target, for instance, debuted its “My Kind of Holiday” campaign this year, which uses holiday catalog Pinterest boards to attract consumers and provide ideas for how to use products in creative ways this holiday season. A solid 16 percent of retailers are leveraging Instagram this year, as well, ranging from apparel brands such as Gap and Patagonia to food retailers like Starbucks.

Flash sales fall off. Daily deals appear to be losing steam, as only one quarter of retailers anticipate using the tactic during the holidays, down from 42 percent in 2012. Flash sales were the top mobile promotion strategy for a plurality (30 percent) of retailers last year. This year, only five percent of retailers cite flash sales as their primary mobile tactic. Overall, greater emphasis on text message campaigns (33 percent) and mobile coupons (28 percent) point to a shift in mobile strategy. Retailers such as Starbucks, which is once again promoting weekly holiday offers via text, are moving to capitalize on the fact that 98 percent of text messages are opened and viewed, according to research from SinglePoint.

The BDO Retail Compass Survey of CMOs is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief marketing officers, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation’s retailers.

About BDO

BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 50 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,204 offices in 138 countries.

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.