• by Ray Schultz , Columnist, March 18, 2022

Email is the preferred channel for retail customer retention, judging by 2022 Digital Trends & Investment Priorities, a study by CommerceNext, conducted in partnership with The CommX Assembly.  

Of the retailers polled, 87% cite email as one of their top three investment allocations for retention in 2022. Loyalty programs are a distant second at 62%, and SMS comes in at 56%. This makes sense, given the need for triggered email systems to serve existing customers. 

This is happening as 55% of retailers forecast revenue growth of 20% or more, while 30% expect growth of 10-20%.

As for the retention spend, customer data management is ranked by 33%, followed by content (blog/newsletters) by 19%, UCC/reviews by 16% and feedback surveys by 10%. 

The picture is different when it comes to acquisition, where companies plan to invest in:

• Paid social — 70% 
• Paid search — 69% 
• Influencer marketing — 46%
• Affiliate/partner relationships — 37%
• SEO — 32%

Email also figures among first-party data initiatives, with 25% having an email referral program in place, 14% expanding one and 9% launching in 2022.  

However, email is far outweighed by customer feedback surveys, which 42% now offer. In addition, 35% are expanding their survey programs.

Loyalty awards are seeing the biggest boost, with 22% planning to add a program and 33% expanding one they already have. 

User account incentives are now offered by 41%, while 29% are planning an expansion.  

Meanwhile, 42% of brands rank digital marketing as the initiative with the biggest impact on sales growth this year — including both acquisition and retention. And 71% rank it as one of the top two impacts. 

Another 31% rate on-site experiences/conversion optimization as having the biggest impact, while 63% place it among the top two.  

But there are risks, listed by respondents as follows:

• Supply-chain constraints — 61% 
• Rising customer acquisition costs — 57%
• Talent recruitments & retention — 64%
• Lack of technical IT resources — 30%
• New wave of COVID — 26%
• Rising operations cost/wage increases — 25% 
• Increased consumer privacy restrictions — 25%
• Lack of investment dollars — 20%
• Outdated system infrastructure — 13%

In contrast, digital-only businesses are much more daunted by the cost of customer acquisition: 

• Supply-chain constraints — 58%
• Rising customer acquisition costs — 75%
• Talent recruitments & retention—46%
• Lack of Technical IT Resources — 20%

The study concludes that search and social “may still garner the greatest share of acquisition budgets, but their effectiveness will continue to decline until retailers have more first-party data to fuel these channels."

It adds that in “the absence of discovering alternative, scalable customer acquisition channels, 2022 will be a mixed digital marketing bag for most. They’ll combine some traditional tactics (like email, paid search, and paid social) with newer trends (like headless and social commerce) — all wrapped in the endless quest to create the ideal customer experience (via loyalty and site experience).” 

CommerceNext surveyed 118 digital marketers at top retailers in December 2021 and January 2022.