Industry Is Expanding In Advertising, Social

Retailers are planning to spend big on more stores, digital technology and marketing initiatives in the year ahead, according to a new report from KPMG. And for many, the impact of social media on their business has increased sharply. 

The report, based on interviews with 101 key retail executives, finds that retailers are definitely in growth mode, with 85% saying that capital spending will stay the same or increase in the year ahead. About 61% of chains will increase spending in geographical expansion, 40% on information technology, and 24% in advertising and marketing.

“The spending on digital is about implementing and improving the omnichannel, and stores are realizing their digital offerings need to provide a seamless retail experience,” Mark Larson, KPMG’s global retail leader, tells Marketing Daily. “And while there are still some fears among conventional retailers that digital will destroy their business model, the forward-thinking ones are seeing how digital can help them transform their business.”



When asked about online retail brands that are working the opposite side of that expansion, such as Bonobos (a menswear company) and Warby Parker (an eyeglass retailer) dabbling in brick-and-mortar locations, he says it makes sense that online retailers would be as eager for insights from physical stores as primarily physical retailers are for digital insights. “It gives their people a chance to learn more about customers firsthand, and that’s a good thing,” he says.

When KPMG queried the execs about which tech trends are having a major impact on their business, 71% named social media (up from 58% last year); 52% say mobile and online shopping, and 51% selected online and mobile coupons and promotion.

Retailers’ assessment of digital channels is also greatly shaping ad spending and branding plans, he says. “Stores are looking more closely at the channel mix of their ad spending, moving more into social and mobile. And along with this changing mix, we are seeing them look for opportunities to better measure ad effectiveness in each channel.”

And while there are still plenty of concerns about consumer spending, he says, the execs paint a reasonably optimistic picture, with 85% predicting growth in the coming year. (Of those, however, 74% think the gains will be under 5%.)

"Busy Store" photo from Shutterstock

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