Marketers Emphasizing E-Commerce Over AdvertisingOctober 1, 2019 Off By administrator
For marketers, digital commerce is becoming a more critical element for business growth and retention, surpassing investment in digital advertising for the first time this year, according to a report from Gartner.
In the report, “2019 Digital Commerce Trends for Marketing Leaders,” Gartner says that marketing leaders now allocate 9.2 percent of their budgets to digital commerce, making it the largest area of marketing investment, ahead of even digital advertising.
“We were surprised by that,” says Jennifer Polk, a Gartner vice president and research director.
Those numbers were pretty much reversed in 2017, when digital commerce accounted for just 8.1 percent of the average marketing budget, according to the research.
The increase in digital commerce investment aligns with an earlier Gartner report in which 62 percent of marketing leaders said they have transformation programs or management initiatives to make their organizations more digital. But to be successful, companies need to have the right tools and capabilities, the firm suggests.
Among those tools, it suggests technology that offers voice and visual cues to deliver the personalized engagements that customers expect. The report recommends that companies integrate these technologies into their digital commerce road maps to align the customer journey with evolving customer preferences and to streamline purchases.
Polk points to the rapid adoption of smart speakers, for example, as a technology that led to growth in this form of conversational commerce.
With those devices, though, privacy is still a major concern, as several technology providers are coming under scrutiny for allegedly listening to conversations without users’ knowledge.
At the same time, customers are increasingly willing to share their personal information with companies, and their level of comfort with companies collecting and using their data grows as their relationship with those companies grows and matures.
There’s extreme value in that data, the report says, noting that data-driven insights enable companies to expand into channels where customers conduct the most transactions while also driving more transactions due to better customer experiences.
“Hyper-customization will be the next frontier for personalization,” Polk says. “It’s potentially a way to drive premium pricing.”
To date, hyper-customization has primarily been used for lower-margin products. Coca-Cola, for example, lets users create their own soda concoctions with the Freestyle machine, and McCormick can tailor spice choices for consumers through its FlavorPrint service, which identifies consumer tastes based on recipes viewed and ratings posted to the company’s website.
Companies still need to be careful how they use consumer data so that their personalized marketing doesn’t feel “creepy” to the customer, Polk…