The ideal budget allocation to boost traffic in retail

What is the best way to attract more customers and increase revenue? Click to discover the ideal formula.

Lucia Fluck

12.07.22 Business 2 min


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# Budget Balance # Increased Revenue # Omnichannel Presence

Digital Marketing is the driving force behind both online and offline purchases. Traditional marketing channels like print, television, and radio have a lesser impact but still play a moderate role. So, when it comes to budget allocation, what is the best way to attract more customers and increase revenue?

Many agree that retailers should invest between 50% and 70% in digital marketing and between 30% and 50% in traditional marketing. In other words, a balanced split of 60/40. However, this formula is not a guarantee of success. To provide an accurate answer, one must evaluate the impact different marketing channels can have on each business. Variables such as creativity and target audience also influence the effectiveness of a campaign.

Omnichannel Challenge

Sales from an omnichannel retailer originating in digital channels are evenly distributed between e-commerce and physical stores. On the other hand, sales from traditional marketing channels mostly occur in physical stores.

To properly allocate the budget, one must meet the challenge of identifying the number of sales driven by marketing, both online and in-store.

Balancing the Marketing Mix in Retail

We know that digital marketing is one of the most crucial factors for achieving good online results. n fact, it is estimated that 22% of the revenue obtained by retailers with an omnichannel presence comes from e-commerce through digital marketing (social media, digital advertising, and search engines), compared to the 8% directly attributed to traditional marketing.

However, it is essential to remember that in the case of offline sales, the scenario is more balanced as they depend equally on digital and traditional marketing channels.

Despite the 60/40 model we discussed earlier, we recommend using it only as a starting point for testing and optimization. But there’s something undeniable: if retailers want to increase revenue from e-commerce in the short term, their strategy must include digital marketing.

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