Retail marketing is turning to influencers. For more than 50 years, retail marketers enjoyed a distinct advantage when it came to understanding and influencing consumer behavior. In the past, fashion retailers had access to detailed research on consumer habits, values, interests, opinions, behaviors, and other psychographic data that helped them drive purchase behavior and product preference.

Retail marketing leveraged a wealth of knowledge about marketing channels like television, magazines, direct mail, and radio, but as consumer behavior shifts from offline to online, it’s increasingly challenging to reach, engage, and influence that behavior. And it’s not that retailers aren’t investing in online marketing – digital ad spending by the retail marketing industry will total over $12 billion this year, which far outpaces spending by all other industries.

To add to the challenge, in-store loyalty doesn’t always translate to online loyalty when online retailers like Amazon draw more of the consumer’s repeat attention. As a larger percentage of consumer purchases happen online, multi-channel marketing has become paramount to the success of brands looking to create a consistent experience for customers, whether in-store or on their laptops, tablets, or smartphones. In fact, a PwC study found that 65 percent of U.S. consumers use at least two channels, with 21 percent shopping from four or ve channels.

One of the strategies being adopted by retailers to help stay connected to the online consumer purchase path is influencer marketing. Influencer Marketing is partnering with social content creators, those with key audiences on Facebook, Twitter, Pinterest, YouTube, and Instagram, to help brands connect and engage with consumers through an authentic and trusted source. This exploding industry is attracting millions of dollars from brands looking for solutions that help them drive value and loyalty between both existing and new target audiences.

Web-savvy consumers now require greater engagement and information before making a purchase. They want meaningful content and relevant information to help them make purchase decisions and they want opinions from people they trust, such as influencers. According to Nielsen, trust is the #1 factor in any buying decision with conversions increasing by 90 percent when someone trusted suggests a product.3 In this paper, we’ll discuss why influencers are important to retail brands and how they can engage consumers.

Consumers are having conversations with their peers online long before they make a purchase. To be effective, brands need to be part of that dialogue.

Four Reasons Why Influencers Matter in Retail Marketing

1. Influencers Reach a Very Targeted Audience

Marketing to a broad audience might raise awareness, but if people aren’t interested in what you’re trying to sell, much of your investment is wasted by not targeting the right audience. Targeting the right influencers means targeting the audience most likely to be interested in your brand.

For example, if you sell running shoes, partnering with a marathon runner with a strong online following gives you direct access to the people most likely to buy your product. Influencers can be segmented by demographic (i.e. millennials, baby boomers), by vertical ( tness, fashion, entertainment), platform (YouTube, Instagram, blogs), geography, or a powerful combination of all four.

2. Influencers Create Trust

75 percent of consumers don’t trust ads and won’t base their buying decisions on them. When they want information on a product, they look for like-minded individuals whose advice they trust.

Influencers garner large, loyal followings because people know they will get real, honest information from them. Building a relationship with these influencers means gaining the inherent trust of their audience, which is harder for brands to do on their own. And while 92 percent of consumers trust recommendations from those they know, 70 percent still value online opinions from people they don’t know.

3. Influencers Generate Active Engagement

Print and television tend to be inherently passive mediums. People see ads, but that doesn’t mean they’re engaged. An influencer, however, thrives on active engagement. An influencer’s content lives or dies by how much it’s shared, discussed, and replied to. People who follow an influencer on Facebook are much more likely to act on a post simply because of the medium. If a brand is looking to stand out in the online sphere and gain followers on its own social media accounts, this type of engagement is key. As a result, budget dollars are shifting from interruptive banner ads to collaborative, engaged mediums like influencers and brand ambassadors.

9 Alarming Stats About Banner Advertising (Digiday)

  1. Over 5.3 trillion display ads were served to U.S. users last year. (ComScore)
  2. The typical Internet user is served 1,707 banner ads per month. (Comscore)
  3. The 468 x 60 banner has a .04 percent click rate. (DoubleClick)
  4. An estimated 31 percent of ad impressions can’t be viewed by users. (Comscore)
  5. 8 percent of Internet users account for 85 percent of clicks. (ComScore)
  6. Up to 50 percent of clicks on mobile banner ads are accidental. (GoldSpot Media)
  7. You’re more likely to survive a plane crash than click a banner ad. (Solve Media)
  8. 34 percent don’t trust banner ads at all or much, compared to 26 percent for magazine ads. (eMarketer)
  9. 9. 25-34-year olds see 2,094 banner ads per month. (ComScore)

4. Influencers Help Drive ROI

As influencer marketing becomes more sophisticated and more widely adopted, measurements and tracking have followed. Influencer marketing has been proven to not only drive more engagement and trust with consumers, it produces those results at a much lower cost than banner ads or other forms of digital marketing. A recent study by RhythmOne Media showed that retailers earned $10.48 in media value for every dollar spent on influencer marketing.