What are five marketing strategies that retailers spend half of their annual budget on?

1. Digital Advertising (Paid Media)

• Budget Share: Often 20–30%
• What it includes:
  • Paid search (Google Ads)
  • Paid social (Meta, TikTok, YouTube)
  • Display and programmatic advertising
  • Retargeting campaigns
• Why: High measurability and scalability. Retailers use this to drive traffic, promote products, and retarget users who didn’t convert.

2. Influencer and Affiliate Marketing

• Budget Share: 10–15%
• What it includes:
  • Payments to influencers for product placement or reviews
  • Affiliate commission payouts
  • Influencer platforms and agencies
• Why: Influencers drive trust and engagement, especially in fashion, beauty, and lifestyle. Performance-based affiliate marketing is also cost-effective.

3. Email and SMS Marketing

• Budget Share: 5–10%
• What it includes:
  • Email platform subscriptions (Klaviyo, Mailchimp, etc.)
  • SMS marketing platforms (Postscript, Attentive)
  • Design, automation, and copywriting services
• Why: High ROI for retention and customer lifetime value. It’s direct, personal, and cost-effective once the list is built.

4. Content Creation and Branding

• Budget Share: 5–10%
• What it includes:
  • Product photography and video
  • Social media content
  • Website content (blogs, landing pages)
  • Creative agencies or in-house teams
• Why: High-quality content builds brand identity and supports every other marketing channel (ads, email, SEO, etc.).

5. Promotions and Discounts (Including Loyalty Programs)

• Budget Share: 10–15%
• What it includes:
  • Cost of running sales and promotions
  • Loyalty and rewards programs
  • Promotional materials and tech platforms
• Why: These directly drive conversions, increase repeat purchases, and can be integrated into seasonal campaigns.

Summary Table:

Together, these often make up 50% or more of a retailer’s annual marketing spend, depending on their size, industry, and digital maturity.