E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
52% of their visitors are newcomers.
Consumer brand manufacturers are continually attracting new visitors to their e-commerce sites. In fact 52% of the traffic to manufacturers in this year’s Top 500 Guide were new to the site, the highest percentage among the four types of merchants ranked in the guide, according to Top 500 data provided by Experian Marketing Services. Catalogers (with 44% of visitors being new to their sites), retail chains (44%) and retailers that only sell via the web (46%) depend on returning customers for the majority of their site visits.
New shopper growth helped manufacturers in 2012 maintain their accustomed position as the leaders in monthly visits among Top 500 retailers. Every year since 2006, consumer brand manufacturers ranked in the guide have maintained the highest average monthly visits compared to catalogers, retail chains and web-only merchants. In 2012, they collectively averaged almost a million more visits (10,051,516) to their sites than web-only retailers (9,074,867), the group that came in second.
How manufacturers attract a lot of traffic is explained by other data contained in the 2013 Top 500 Guide. According to search marketing firm ROI Revolution, Top 500 manufacturers spent over $200,000 per month on average on paid search ads, coming in second to only the deep pockets of retail chains, which spent almost $250,000 a month. Paid search spending for manufacturers was up almost 30% in 2012 compared to 2011, the second-biggest growth rate, again behind just retail chains.
Another way brands connect with consumers and drive new traffic to their sites is through social media. All 66 manufacturers listed in this year’s Top 500 are active on Facebook and Twitter, and they have amassed impressive metrics in terms of social media participation. They have the highest average number of Facebook Likes (over 1.9 million) of the four merchant types, almost seven times that of the number of Likes for the average web-only retailer in the Top 500.
Luxury apparel retailer Burberry Ltd. (No. 365) is a prime example of a manufacturer that has capitalized on the power of Facebook. The brand has accumulated almost 15 million Likes, which is just shy of Amazon.com Inc.’s 16 million. Last year, L2 Think Tank, a research group focused on digital innovation among luxury retailers, named Burberry “the World’s most Digitally Competent Luxury Brand.”
Andrea Derricks, an associate at L2 Think Tank who led a multichannel study on 100 top-rated luxury brands, says the nature of social media marketing among brand manufacturers is changing. “In the future, social media strategy will be less focused on the initial capture and more on the ongoing relationship with the customer, eventually converting to multiple sales,” Derricks says. L2 discovered that Burberry’s traffic from social media spiked at about 20% of online traffic in early 2012, most of that coming from Facebook, and now has regressed to the usual 2-4% range that most retailers see. Derricks says this is a result of a shift in social strategy that she’s seen from several retailers. Increasingly, she says, retailers are replacing periodic campaigns with a consistent, ongoing strategy to help serve existing customers and promote brand awareness. Burberry declined to comment.
Baking flour maker King Arthur Flour, which at No. 6 was the highest-ranking manufacturer in the Internet Retailer Social Media 300, understands the importance of engaging its customer base and allowing shoppers to interact with the brand and each other. The company says that last year 15-20% of its site traffic came from social media, including 10.5% from Pinterest, a number that is on the rise in 2013.
“The key is to make content that is as shareable as possible,” says Aime Schwartz, new media coordinator at King Arthur Flour. “People coming to our site from social outlets are looking to be inspired, to share recipes with friends and get validation from their peers.” Schwartz says that the company focuses its Pinterest activity not on immediately selling its products, but on strengthening the bond with shoppers and secure repeat customers.
Over the last several years, the link between social media and e-commerce has grown stronger. According to The Nielsen Co.’s “State of the Media: The Social Media Report 2012,” 10% of U.S. consumer have made purchased a product online based on an ad they saw on social networks. Furthermore, 18% of shoppers last year obtained a coupon via a social network.
The couponing aspect of social media’s appeal is reinforced by a March 2013 study conducted by Forrester Research Inc. The study asked participants what aspects of a brand were important while doing research online. 70% of consumers indicated that sales, discounts and promotions were most important, followed by 57% saying the brand’s reputation was the most significant research factor.
The only manufacturer in the Top 500 with more Facebook Likes than Burberry was Levi Strauss & Co. (No. 397) at over 16 million. Levi has also established itself as a leader in mobile commerce. The jeans manufacturer, ranked No. 87 in the 2013 Internet Retailer Mobile Commerce 400, launched its mobile site in 2010 and reached $14 million in m-commerce sales last year, accounting for over one-third of its e-commerce sales in 2012.
Understanding the importance of mobile media consumption, Levi’s extended its “Go Forth” global ad campaign, which highlights its fall/winter collection, to the mobile platform last October, a spokeswoman says. “Consumers can engage in mobile experiences that bring the product stories to life, including the first-ever shoppable brand magazine on Flipboard,” she says.
The proliferation of smartphones has undeniably impacted online retail, as evidenced by a new study by Arbitron Mobile, a mobile behavior analytics firm. The study shows that about 56% of U.S. smartphone owners used a mobile commerce app in March 2013. The share of U.K. smartphone users who spent time on an m-commerce app was even higher, at almost 67%.