Digital Diary is heading to the Digital Retail Transformation Assembly this week. In preparation for the event, we sat down with Udayan Bose, Founder & CEO at NetElixir and asked him about the future of search marketing and how retailers should prepare for the upcoming holiday season.
What is the future of Search Marketing?
UB: Over the past 17+ years, search marketing has been the most successful digital marketing channel, especially for ROI focused businesses. Almost 50% of total digital marketing spend is invested on Search Marketing. We predict the effectiveness of search to remain intact in years to come. However, Search Marketing has evolved and will continue to evolve due to major shifts in consumer behavior and industry trends.
Here are the top 3 trends that we believe will dominate the world of search marketing over the next 3-5 years –
- From Search to Discovery: Search is no longer just intent driven, Serendipitous searches are on the rise, primarily driven by social channels like Facebook. The shopper journey has become more complex with the number of touch points (and, time) between first click and purchase increasing at a rapid of almost 3-5% Y/Y. Search Marketing initiatives (or, should we say DISCOVERY MARKETING) need to build around a deeper understanding the buyer journeys.
- The Relentless Rise of the Amazon Search Bar: Amazon is the #1 product search engine. The number of product-specific searches that happen on Amazon outnumbers Google by almost 2:1. This has massive implications for retail search marketers. They need to include Amazon in their marketing plans (knowing that they will be sharing the customer data with the retail behemoth) and answer a fundamental question – “how much should I lean on Amazon”.
- The Rapid Growth of Voice Search: Voice search threatens to change how search is done today. Per a research study conducted by NetElixir of 500 voice search device customers – Amazon’s Alexa seems to be clearly in the lead (Alexa devices outnumber Google Assistant by 8:1); Users believe there is a huge scope of improvement in the quality of voice search results (but are confident that it will only improve over the years); and, voice search led purchases will grow beyond just music and grocery (today) to other retail categories. Marketers need to have a plan for voice search (making their website content more conversational; using local store locations, etc.)
Data powers marketing decisions. How can marketers use data to better predict and prepare for the holiday season?
UB: There are three things EVERY RETAIL MARKETER needs to do to be better prepared for Holidays –
Analyze what worked and what didn’t work in prior years: As simple as it sounds, we regularly see marketers committing the same mistakes that they did earlier.
Decide What Products You Want to Sell and Why: As an agency that is currently working with over 200 retailers (out of which 60% are holiday retailers), we compete with Amazon and Walmart all the time. One recommendation that we share with our customers (mid-size and large retailers) is to carefully choose the product categories they want to REALLY COMPETE on. We KNOW that the days of “We will sell all products” are far gone. Unless the retailers are very careful in choosing their “holiday product mix”, they are bound to waste a lot of money chasing unprofitable products and not focusing as much on “the core products”.
Understand the Customer Journey and Market Responsibly: Customers have (rightly so) become increasingly intolerant to mindless advertising. Every marketer needs to exercise an ongoing effort in analyzing the customer journeys and creating a more responsible marketing program that truly engages their customers.
What is NetElixir predicting for the holiday season this year?
UB: This is our 9th year of publishing the Holiday Ecommerce Sales forecast. Our forecasts have been 100% accurate (vs. actual holiday ecommerce sales data published by NRF in January) in all but 2 of these 9 years. Our forecasts are based on our client dataset of about 80 mid-size and large retail ecommerce firms. We track their weekly online sales through the year, analyze the impact of major holidays/events like Back-to-school and base our forecasts on the aggregated data. For this holiday season, we are forecasting a modest 10% Y/Y growth in ecommerce sales revenue. Furthermore, we believe, Amazon’s share of total online holiday sales will increase to 34% this year (from 30% in 2016). Retailers that lack a differentiated product offering or strong customer loyalty will struggle to grow. Mobile will drive 35%+ of all online sales.
We’re excited that NetElixir is attending our event next week. Can you give our readers a hint as to what you’ll be showcasing?
UB: We are excited to be attending your event. We will be sharing Best Practices (as well as challenges) in Holiday Search Marketing. This will be NetElixir’s 14th Holiday Season. Being an exclusively retail-focused search agency, we have had the opportunity to work with 400+ retailers over the past 13 + years (of which 60%+ had heavy holiday focus) and understand what works and what does not work during the holidays. Marketers can also access our Holiday Readiness Resources here: https://www.netelixir.com/holidays.
This year, we have collaborated with the Forrester Group to document and publish our thoughts on the Future of Search Marketing. With almost half of all digital marketing investment on search, every marketer needs to be aware of some fundamental shifts that are happening in the industry and consumer buying process. We will be sharing our thoughts on the Future of Search Marketing and distributing a book on this topic at your event.
What are the benefits of attending an intimate C-Level event like ours?
UB: Digital Retail is going through an era of unprecedented change. Literally every day, the rules of online retail are getting re-written. As an exclusive retail search marketing agency, we have been fortunate to witness this change, first hand. An intimate C-level event such as yours helps us share our ideas and observations with senior executive – they are the ones that are driving the change strategies for their respective retail businesses. We are also able to gain a first-hand understanding of the challenges they face running successful retail organizations. This knowledge enables us to create customized digital marketing solutions that address their “pain points” in a more precise and effective manner.
Thanks Udayan for taking the time to chat with us! See you in Salt Lake City.
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