Last year, we conducted a survey of premium home and garden retailers, seeking to understand their use of, and attitudes towards digital marketing.

This year, we have looked at the food and drink sector, focusing on retailers selling premium/luxury products online. The basic premise remained the same as the previous home and garden study; to better understand the marketing tactics being employed by retailers, what they felt was working (or not, as the case may be) and plans for 2011.

This research was conducted over a series of one-to-one qualitative interviews.  Out of a target list of 80 companies, a quarter were kind enough to take part in almost 40 hours of discussions.

Top level findings

In summary, we found that a lack of understanding, lack of resource and inaccurate reporting are key factors hampering online success in the premium food and drink sector. The research revealed many companies are seemingly hamstrung by a failure to map digital marketing activity back to their overall business and financial objectives. Indeed, fewer than 20% of respondents know the return on investment (ROI) they are seeing from digital marketing and only a quarter of our interview sample is measuring the lifetime value of a customer.

However, companies are seemingly willing to continue increasing investment in certain activities without setting clear objectives and having the tools in place to measure the impact. Social media, which includes social networking, forums and communities and blogging, is shown to be an activity that many of the respondents do not fully understand and, historically, have been unable to measure results with any degree of accuracy. However, almost half of respondents plan on dedicating greater resource to this activity in 2011.

You can download for full report for free. It also includes a number of key questions (page 6) that we believe premium food and drink retailers need to be asking of themselves if they are to achieve the following:

• Link digital marketing activity to overall commercial and financial objectives

• Invest, what is often limited resources (time and money), in the right areas

• Measure the impact of activity back to the bottom line

• Keep abreast of the new developments and shifts in consumer behaviour

If you would like to discuss any aspect of the report findings, please get in touch with Ben Potter.