Concerned with Economic Challenges Ahead, Retailers are Focusing on Retention and Pulling Back on Social in 2023
New survey finds marketers will prioritize current customer experiences over new technologies
CommerceNext and CommX announced their latest benchmark report on growth, risk and strategy: 2023 Digital Trends & Investment Priorities. In partnership with CommX, CommerceNext surveyed 108 digital marketing and ecommerce executives spanning various retail models and annual sales volume for the report. According to the survey, reduced consumer spending, lack of investment dollars and ad-targeting capabilities are the biggest impediments to retailers achieving their 2023 revenue goals. Nearly half (45%) of respondents projected flat to single-digit growth this year and 11% projected negative growth.
“It is great to see brands and retailers focused on personalization and optimization of their commerce experiences and digital marketing efforts in 2023”
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While the pandemic created years of uncertainty, retailers entered 2022 with a positive outlook and expectation of growth. Yet, the industry faced numerous challenges throughout this past year, including inflation and interest rate hikes. While 85% of retailers polled in 2021 expected double-digit growth in 2022, the reality was 42% of the retail respondents this December 2022 reported flat or declined sales in 2022. And although the pandemic-era’s pressing issues seem to be under control, 2023 is set to bring about more economic-driven challenges for marketers. The survey found that marketers will have to continue to rely on retention as their main strategy for driving revenue and are focusing less on social.
“Retailers are starting off the new year with a realistic understanding of the slowing online growth and, in several cases, online sales declines they’ll be facing in 2023,” said Veronika Sonsev, Co-Founder of CommerceNext. “In response to this reality, marketing leaders will concentrate their resources into refining and improving their current customer experiences rather than investing into new technologies.”
Retailers are planning to move away from paid social and seek alternative marketing channels, with 38% reporting retention and 37% reporting acquisition as the biggest drivers for their performance and growth in 2023. Email, SMS, and loyalty will get the largest share of investment within retention. Search continues to be a top focus on the acquisition side, and although social ranks second, KPI performance rapidly declined this year for a majority (68%) of respondents, with 66% and 46% planning to pull back spending on Facebook and Instagram, respectively.
“It is great to see brands and retailers focused on personalization and optimization of their commerce experiences and digital marketing efforts in 2023,” said Brian Walker, Chief Strategy Officer at Bloomreach, a CommX founding member. “This report gives merchants and marketers the data they need to ensure their organizations stay competitive and maximize ROI and growth in a challenging environment. It is a must read in my opinion.”
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