• by Jack Loechner , Staff Writer @mp_research, March 24, 2016

According to a study by RetailMeNot, retailers today recognize the impact that mobile is having on their business and on consumers, and they have steadily begun to invest more marketing dollars into building out their mobile platforms. However, in 2015, many retailers still allocated a majority of marketing dollars towards offline tactics such as TV and print advertising, circulars and out-of-home (OOH) advertising. 59%of retail executives spend less than half of their marketing budgets on digital channels.

 In 2016, brands need to mirror the immense consumer shift toward mobile consumption with their marketing investments, says the report. Retail leaders continue to find value in digital spend, and more specifically mobile, and many are set to increase budgets in these areas in the coming months.

In January 2016, RetailMeNot commissioned Kelton Global to survey 200 retail marketers, at the senior-level or above and who were at least partially responsible for financial decisions, on their expected marketing spend in the coming year. This survey yielded three key takeaways:

• Digital marketing spend is set to increase across all channels.Retail decision-makers are poised to increase marketing spend across both online and offline channels, with mobile budgets set to grow the most. As competition for consumer attention intensifies, retailers’ marketing efforts are fundamental in keeping their brand top of mind for on-the-go shoppers.
• The majority of retailers surveyed believe that their organization has not yet fully tapped into the value of mobile. With the rise of Amazon market share among online shoppers, retail executives are faced with the challenge of competing for the remaining share of sales. Mobile will play a crucial role in creating a seamless experience for retailers across channels and provides ample opportunities to grow their in-store business.
• Retailers are open to new tactics to help push in-store success. As consumers move between offline and online channels, brands continue to search for, and invest in, tactics that drive higher engagement and boost loyalty and spend. Retail decision makers are open to dedicating budget to a variety of mobile tactics, but interest in areas like location-based marketing still have room for growth.

For several years, the overwhelming majority of retailers have agreed that digital marketing spend has a higher return on investment (ROI) than traditional offline marketing.

Return On Investment Is Greater Via Your...?

            Offline Marketing                              24%

            Digital Marketing (desktop/mobile)          76%

Source: KeltonGlobal/RetailMeNot, March 2016

Nevertheless, retail marketers have been hesitant to have their budgets align with their beliefs. In 2015, retailer spend was almost split down the middle for digital (51%) and offline marketing (49%) budgets. But for 2016, 87% of those surveyed say they will increase mobile budgets this year. Additionally, with e-commerce growth slowing in 2015, they plan to shift more of their non-mobile digital dollars into other areas of investment.

Beyond Amazon, and a small handful of mobile-focused retailers, no one has really taken a lead in the mobile commerce space, notes the report. During the holiday season, Amazon captured 51% of e-commerce sales growth, while all remaining online retailers battled for the other 49%. With nearly 4 in 10 retailers (39%) ready to make mobile a major component of their budget, they are better poised for success in 2016.

Marketing decision-makers say, on average, that 43% of their marketing budget will be spent in a mobile channel in 2016. However, 76% believe that while they are getting some value out of mobile marketing there is still room to gain more. 53% of those surveyed, though, feel that their efforts are on pace with other middle-of-the-pack industry retailers.

In 2016, 74% of retailer mobile teams will be responsible for driving both mobile and in-store traffic. As retailers more widely accept the influence that mobile has on their sales across channels, marketing teams are shifting their digital KPIs beyond just e-commerce and are now taking a closer look at the in- store journey. Many consumers view their smartphone as a research tool, and visibility to store inventory or location- based deals and more may provide the incentive needed to drive them inside stores, says the report.

While technologies like beacons and geo-fences are still in their infancy, the value of location marketing lies in the ability to reach those consumers who have opted-in to these services whenever and wherever they are, in addition to providing the retailer with crucial consumer data. However, investment growth in this area remains slow, falling to the bottom of the list of retailer priorities in 2016

This survey found that 58% of retailers partner with social media platforms (e.g. Facebook, Twitter, Instagram), followed by:

• Promotion code platforms (e.g. RetailMeNot, Savings.com)    48%
• Digital wallet providers (e.g. Google Wallet, Apple Passbook, Paypal)    46%

Among the top three types of marketing partnerships that retail marketers are investing in, promotion code sites provide the highest above- average ROI (71%) followed by:

• Social media   63%
• Digital wallets   61%

Top Ten Partners Yielding Best ROI

1. Facebook

2. Groupon

3. RetailMeNot

4. Paypal

5. Ebates

6. Google Shopping

7. Google Wallet

8. Instagram

9. DealNews

10. ValPak

Source: KeltonGlobal/RetailMeNot, March 2016

Partnerships can be a smart addition to a brand’s marketing mix. They provide increased reach and engagement, and often will help alleviate any resource or expertise challenges that retail marketers may face, says the report.

The report concludes by noting that, in 2016, retail marketers will come out ahead only if they remove themselves from the middle of the pack. Marketing partnerships can allow retailers access to more data and the ability to reach new audiences. Brands can drive interest and engagement with a variety of tactics, but they must be prepared to meet consumers in their mobile moments.

Long gone are the days of interruptive advertising leading the way. Marketers need to become a part of the conversation. Retailers should focus on providing relevant content to consumers, whenever and wherever they need it, says the report.

For more from RetailMeNot, please visit here.