New survey also finds marketers are focusing on existing customers to protect and grow their brand amid rising social media ad costs
After a strong 2021, retailers are generally optimistic about digital sales this year and are looking to build lifetime value with customers through loyalty programs and better, more personal customer experiences to mitigate rising social media advertising costs, continuing supply chain challenges and increasing inflation. According to a recent survey of 118 digital marketing and e-commerce executives conducted by CommerceNext in partnership with CommX, developing more meaningful customer relationships through loyalty programs is a top priority for brands, with 52% of respondents planning to either launch a loyalty program in 2022 or expand their current one. The survey also found that many retailers think investing in buzzy technologies like crypto payments and AR/VR is a much lower priority than investing in personalization, navigation and discovery, and search in order to keep customers coming back.
“Paid social will remain the top acquisition channel in 2022, but its high costs have retailers looking for models that will generate higher ROI in 2022,” said Scott Silverman, Co-Founder of CommerceNext. “Brands looking to endear their customers to them are prioritizing loyalty, experience and personalization and we’ll see retailers focusing their money and marketing efforts on either launching or expanding loyalty programs in 2022 in order to build better, more enduring brands.”
“The more brands prioritize the customer experience, and retention through diversified efforts beyond acquisition and paid social, the better they’ll fare throughout the year and the more sustainable their business will be.”
Among all executives surveyed, supply chain challenges continue to be seen as the primary risk to achieving desired sales results, cited by 61% of respondents, while 75% of digital-first retailers surveyed said rising customer acquisition costs were their primary concern. Inflation concerns are top of mind, too, with 56% of respondents anticipating a minimum 6% increase in prices and 20% expecting an increase of over 10%. In terms of opportunities for 2022, retailers see the on-site consumer experience as a high-impact priority and are ramping up personalization efforts and upgrading site search and product discovery tools. Added revenue streams, like international e-commerce, are clear areas of focus as well, while brand executives’ views on social commerce are mixed, with 45% of respondents saying they are still “considering it,” but not prioritizing it.
“With a number of headwinds ahead for retailers in terms of the supply chain, inflation, and world events it’s now more important than ever for brands to invest in opportunities that allow them to own their own data and build that lifetime value for customers,” said Brian Walker, Chief Strategy Officer of Bloomreach, a founding member of CommX. “The more brands prioritize the customer experience, and retention through diversified efforts beyond acquisition and paid social, the better they’ll fare throughout the year and the more sustainable their business will be.”
Read More: SalesTechStar Interview With Garient Evans, SVP, Identity Solutions At Trulioo