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Forrester: Online retailers lagging with social media marketing

Forrester: Online retailers lagging with social media marketing

Australian online retailers still preoccupied with e-commerce platform refreshes

Social marketing can yield lucrative business conversions, but online retailers are still in the early days of adoption, according to a Forrester report.

The Online Retailing in Australia 2010: Marketing, Merchandising and Customer Service report claims that “on the whole, Australian online retailers are focused on the start and middle of the purchase journey. In other words they have emphasised acquisition and conversion over retention, favouring performance-based marketing in general and search marketing in particular. This is a natural starting point for any online retailer, as all must acquire customers before they can retain them.”

In layman’s terms, this means that search engine marketing, “follow” buttons for Facebook and Twitter, and email continue to be the focus for online retailers, while Web forums, customer reviews and mobile phone applications are low priorities.

Forrester research senior analyst, Steven Noble, said online retailers are currently occupied with replacing their e-commerce platform – or would be doing so within the next two years – before they contemplate more advanced social media strategies.

“Most of these retailers have grown up with ill-fitting platforms,” Noble said.

“There’s a significant investment that needs to be made to enable businesses to move to the next level and enable a whole range of things that they can’t do currently.”

It’s for this reason that the higher-traction social marketing strategies, such as mobile applications (Dominos Pizza for instance, gained a great deal from its iPhone app), are less popular with online retailers than the relatively low conversion-rate strategies such as a Twitter group.

“Really, the only reason Twitter and Facebook groups are justified is they are low cost to maintain, and in guarding against future trends,” Noble said.

“However, online retailers have finite resources and are involved with platform refreshes. Overall they’ve seen greater value in getting the basics right.”

Noble also claimed that social media marketing would not replace conventional strategies into the future. Although the Online Retailing report claimed that online retailers expressed little confidence in traditional tactics like catalogue marketing or television advertising, email and other offline advertising would continue to see investment going forwards.

“Social media marketing is an additional channel born on the evolution of traditional channels,” Noble said.


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