This report benchmarks the digital retail industry including the adoption and management of performance marketing programs such as partner marketing alongside other marketing tactics. The fundamental principle of performance marketing is that all activities should be tracked, measured, recorded and rewarded based on their performance—such as a click-through or conversion. The results analyzed in this report were gathered from survey responses over the summer of 2016 from a large range of executives representing leading retail brands.
Key topics include:
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- Acquisition and Retention Strategy Across Channels
- ROI & Measurement
- Spend Across Marketing Channels
- Leading retailers now employ partner marketing in strategies for both customer acquisition and retention of customers. As traditional affiliate marketing has evolved, so has its value. Historically, the affiliate marketing channel has been known to only drive customer acquisition. But since partner marketing methodologies can now be applied to a wider array of nontraditional partners ranging from meta search engines to mobile apps, new opportunities have opened up for retailers to use performance-based measurement models for customer retention across more touchpoints.
- For performance-based partner marketing, expecting independent verification is a trend that is set to continue in the retail industry. As retailers compete in the multichannel digital world, they are almost universally facing pressures to quantify the impact of their business decisions. Performance marketing may be particularly well suited to address these concerns as its underlying model is based on measuring, optimizing, and rewarding marketing activities.
- Expanding the use of performance-based partner marketing methodologies addresses the pressure to measure results across the quickly expanding mobile channel. Retailers almost universally expect mobile conversions to increase. The combination of the increasing pressure for measurement of performance and the expected increase in conversions across both mobile web and mobile app suggests that mobile would be a good channel to apply performance-based models and increase investment.
- One of the most valuable aspects of marketing partnerships is the wealth of performance data resulting from online and offline sales conversion measurement that can be used immediately to drive better performance. Retailers find that the data from their partner marketing programs provides them with high quality insights across transparency, fraud, contribution, attribution, and—most importantly—useful insights that support business decision-making to drive more revenues and increase profitability.
- Currently, the top 3% of retail brands generates 80% of their annual revenues through performance marketing programs. With many respondents attributing significant shares of their revenues to performance- based marketing, the reported high level of investment by many retailers seems to be justified.