Partnership is an important and growing segment of performance marketing for retailers, driving a significant portion of sales and investment from business leaders. With the majority of retail companies reporting that partnerships now drive more than a fifth of their sales, it’s clear that this highly efficient business channel is now a critical part of many marketing plans.
Nearly all retail brands currently pursue some form of partnership, and view building these out as a high priority. As to how people manage and talk about the industry, we appear to be in a period of flux, with no management approach or nomenclature dominating the space. That said, the passion and interest in partnerships among retail business leaders is high.
To understand the key drivers of that growth, and to capture a strong view into how leading marketing, sales and business development leaders view the retail space, we commissioned this massive global study about retail partnerships. In addition to facts about the size and growth of the sector, we also solicited opinions about products and services available to the industry.
The purpose of this partner and affiliate marketing research was to understand the size, growth trends, and role of partnership in the retail marketing mix, and to capture perspective from senior business leaders on how they view this growing marketing channel.
Internet and telephone survey with invitations delivered to a broad cross-section of retail business leaders by WBR Research. Some respondents directly manage a retail partner and affiliate program(s) -- they are active affiliate marketers. But many are more senior in their organizations, responsible for far more than affiliate marketing programs.
About 400 completed surveys from four key regions:
EMEA (101 responses)
NORTH AMERICA (100 responses)
AUSTRALIA/NEW ZEALAND (107 responses)
ASIA (104 responses)
Respondents were mostly senior marketers and brand leaders. 75% were above the level of manager, and 45% were above the level of director.
Major Brand Focused
Our research focused primarily on capturing insights from leaders of large brands. 73% of respondents work for firms generating more than US$500,000,000 in annual sales. 41% work for companies with greater than US$2,000,000,000 in annual sales. 18% at companies with greater than US$5,000,000,000 in annual sales.
Partnership is an important and growing segment of performance marketing, driving a significant portion of sales and investment from business leaders. With the majority of companies reporting that that their partner/affiliate marketing program(s) now drive more than a fifth of their sales, it’s clear that this highly efficient business channel is now a critical part of many marketing plans.
Virtually all brands pursue some forms of performance partnership and/or affiliate marketing, and view it as a high priority. As to how people manage and talk about the industry, we appear to be in a period of flux, with no management structure, tools, or even nomenclature dominating the space. That said, the passion and interest in partnerships among business leaders is high.
Research findings pointed to a number of specific key takeaways:
- Virtually all retail companies surveyed are already active in partnerships and affiliate, and most of the people who don’t yet have partner programs plan to introduce them in the next 12 months.
- Partnerships are playing a key role in driving revenue for many retail companies. More than half of our sample (57%) reported that partnerships drive more than 20% of total company revenue.
- Partnerships are a high priority for retailers. 78% report that partnerships are a high or very high priority for their businesses. Just 1% say they will invest less on partnerships this year versus last year.
- More than half of respondents say partnerships are driving more sales this year than last year. Just 1% say partnership sales have declined for their businesses.
- The top retail brand leader priorities include finding more partners (29%) and strengthening relationships with existing partners (24%,) two key growth strategies for the channel.
- Partnerships are viewed as a key potential growth channel for retailers. A massive 71% of respondents see additional sales potential in the channel, and 26% see massive incremental potential.
- Many leading retail brands are prioritizing large partners versus forging agreements with thousands of potential partners. The most common number of partners for a retailer is 50-99 (34%). 62% of retail brands report having less than 100 total partners. Just 2% of retailers surveyed partner with more than 1,000 businesses.
- Many retail brands report significant revenue coming from “emerging” partnership channels like influencers (17%), and brand-to-brand partnerships (13%). While “traditional” affiliate-style partners drive more sales than other channels (42% for traditional partners like loyalty communities and 11% long-tail publishers), strong sales for these emerging channels proves the theory that the category and definition of partnership is broadening.
- Networks and third-party software are commonly used to field and manage partnerships. Because partnership is broader than just affiliate marketing, only about half of our marketers report relying on networks for partnerships. Just over half (61%) of the retail brand leaders surveyed say they work with an affiliate network to manage partnerships. One third of those who work with a network work with them exclusively, while just over half also work with third-party partner management software like that offered by Partnerize. About a fifth of marketers eschew networks and work exclusively with third-party software.
- The terminology used in the partnerships arena is in flux. The vast majority of our respondents (87%) are familiar with the term ‘affiliate marketing’ Most view affiliate and partnership as related categories. Across the industry, we’ve seen growing acceptance of the idea that partnership is a broad category that includes affiliate. 50% of respondents agreed with this assertion – the most common POV.
Increased Revenue Drives More Investment
The study demonstrates that, without a doubt, partner marketing is driving tremendous growth in the retail sector:
With this additional revenue comes increased investment in the channel:
In our next post on this research, we will dig deeper into data on retail partnership strategy and technology.