Retailers continue to invest in mobile and social despite poor ROI

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The State of Retailing Online report, conducted by Forrester Research for Shop.org and released on May 3, revealed that 91% of retailers currently have a mobile strategy in place or in development and that 72% of retailers will increase their spending on social networks this year over last year.

The interesting thing to note about retailers' ever-increasing devotion to mobile and social is that traffic and revenue generated from both media outlets has not yet warranted the allotted resources. According to the report, the overall amount of mobile traffic and revenue has “not increased dramatically” and the ROI associated with social is “muddy.”

“On average, retailers report that only a small single-digit percent of sales can be attributed to social media at this juncture,” writes Sucharita Mulpuru, Forrester VP and principal analyst, in the report. “Close to two-thirds (62% and 61%, respectively) of retailers surveyed also note that the ROI associated with social is unclear and that the primary ROI is around listening.”

The same can be said for mobile investments: “In the past year, even with greater investment, the overall average metrics of traffic and revenue to sites from smartphones has not increased significantly,” writes Mulpuru.

Mulpuru explained the paradox to Direct Marketing News via email:As for social, I think no one wants to be a late mover,” she explained, “and all the hype around social networks in particular lead people to think that it's something they need to do.”

In her email she explained that ROI and traffic metrics are less murky for mobile and that investment levels are still modest. Retailers are investing in mobile “mainly just to get sites functional on different types of browsers,' she explained. “ That's e-commerce 101, frankly.”

Shop.org head of research Fiona Swerdlow echoed Mulpuru's statements.

“Retailers feel like there's potential around social,” she said. “If they don't put money into it they can't learn about it and they have to keep learning. Even if it doesn't deliver on retention and acquisition, they concede social is great for brand building and customer listening.”

She said the same is true of mobile, where retailers continue to invest resources in order to understand how to improve customer experiences.

“Retailers realize consumers have smartphones in their hand, briefcase or jacket pocket, whenever they walk into a physical store,” she said. “These channels are converging. Can retailers push offers? Can they use the smartphone to help the shopper navigate the store better? Maybe eventually things like check out will be possible. Retailers realize smartphones can enhance the in-store experience.”  

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