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Online retailers report significant gains in sales and new customers as they add marketing methods, but also strains on their staff. 55% of retailers outsource at least a part of their online marketing, according to a new study by JupiterResearch LLC.
Online retailers report significant gains in sales and new customers as they add marketing methods, but also strains on their staff, according to a new report by research and consulting firm JupiterResearch LLC commissioned by ChannelAdvisor, a company that helps e-retailers sell through multiple online channels.
Nearly all (98%) of 115 online retailers surveyed in March said they use more than one method to market online. Besides a web site, the most popular methods-or channels as the reports call them-were e-mail (80%), search engine optimization (80%) and paid search ads (73%).
87% of retailers who have expanded their marketing approaches report higher sales and 80% attracted new customers. 57% of retailers say the biggest challenge to marketing through multiple methods is the lack of staff. Incompatible legacy systems and data was a problem reported by 34% of merchants with more than $1 million in annual online revenue, versus 8% of smaller merchants, and of 33% of merchant marketing through six or more methods, versus 21% of those using two to five.
“As multi-channel retailers reach a point at which they consider operating in six or more online channels, they should be particularly wary of the potential strain on their internal staff,” the report says. “It is also a point at which sharing data, e.g., inventory management, sales leads) across increasing numbers of channels can strain organizations’ legacy systems.”
55% of the retailers surveyed outsource at least part of their online marketing efforts, with 40% hiring an outside firm with e-mail marketing expertise and 37% seeking held with paid search ad placements. 70% of those who outsource say it enables faster adjustments to market conditions and 69% report higher sales.
For Sophia’s Styles, an online retailer of children’s apparel, outsourcing channel management to ChannelAdvisor has helped increase sales in three years from $12,000 a month to $320,000, says Belinda North, co-owner of the company with her husband Jacob. Initially an eBay seller only, ChannelAdvisor has helped the retailer sell through Amazon.com, Overstock.com, Google Base and other online marketplaces, North says. A big advantage, she adds, is that ChannelAdvisor keeps track of the retailer’s inventory for all its sales channels.
While customers buying through these marketplaces may not know they’re buying from Sophia’s Styles, the retailer invites them to sign up for an e-mail newsletter and promotes its web site through marketing materials included with each product shipped. “Once they get our materials they can shop off our own web site, which is what you want,” North says. Traffic to the site has grown from an average of 50 hits per day three years ago to about 8,000, North says.