Competitors feel the heat as Zara’s online launch leads to 19,000% increase in paid search traffic

Fast fashion retailer Zara has put the fire under other local brands to spend more on paid search traffic drivers, with data from online marketing data platform SEMRush suggesting local retailers dramatically increased their digital marketing spends ahead of  Zara’s Australian e-commerce launch.

However, small businesses are being cautioned to run their own spending race rather than upping the ante because big brands and showing firepower.

SEMRush crunched the numbers on where traffic to online retailers was coming from between January and March of this year. The firm says organic search traffic to Zara in Australia was up 50% over this time, but when you look at the increase in traffic from paid search drivers, this increase jumped by 18,900%. Zara launched its online Australian store in March. 

When surveying the search traffic origins of nine online retailers in Australia, SEMRush found a series of Zara’s local competitors also ramped up their spending on paid activity between January and March:

1. Zara: 18900% increase

2. Showpo: 2000% increase

3. PrettyLittleThing: 1000% increase

4. Missguided: 400% increase

5. The Iconic: 90% increase

6. David Jones: 60% increase

7. ASOS: 50% increase

8. Cotton On: 30% increase

9. Surfstich: 20% increase

The increases in paid traffic indicate Aussie retailers have been upping their spend over the past few months ahead of Zara’s online store launch, SEMRush head of global marketing Olga Andrieko said in a statement.

“Local retailers are now trying to neutralise the effect of Zara’s launch here,” she said.

One of the brands on the list is fashion retailer Showpo, which saw its paid traffic increase by 2000% between January and March, according to SEMRush. However, Showpo’s chief marketing office Mark Baartse told Inside Retail on Tuesday the retailer’s outlay had not increased over this period beyond its regular, scheduled spending.

“We welcome the many new entrants to the market,” he said.

Smaller brands looking at these numbers as a guide for their own strategies should tread carefully, says partner at digital agency Sparro, Morris Bryant.

“The change in Zara’s search traffic in SEMRush is from an extremely low base, so it’s not altogether surprising for a brand that’s scaling up its presence online in Australia,” he tells SmartCompany.

However, Bryant says tools used to track the traffic sources of other companies are not always completely accurate, so while the entrance of a big player into the market can spark spending wars on search terms, this should not be enough to change your search engine marketing (SEM) strategy alone.

Bryant says that a quick search this morning of three of his own clients’ spending through these tools returned results that significantly underestimated what those clients actually spend on paid search.

All the same, it is worth noting that a new business in a market can spark a bidding war for paid search terms.

“An aggressive player entering a market can certainly raise the AdWords auction for other advertisers, depending on how much their keywords overlap. We often see competitor movement affect our clients during sale periods or at the end of the month when other advertisers either run out of budget, or push to spend remaining budget,” he says.

But Bryant says no matter what business you’re in, your SEM spend should never be guided by other brands.

“It’s wrong to assume that what a competitor is doing online is working for them, or that it will work for you. In the end, nothing is more important than optimising your efforts towards your own profitability, reach and customer experience,” he says.

Pippa Kulmar, strategist at Retail Oasis, agrees. She says that in cases like the Zara launch the heat may be turned up on retailers to spend big on paid search, meaning smaller brands have to find an alternative.

“You can put a lot of money behind an idea, but larger retailers are always going to have more resources than you to do this,” she says.

Focus on organic search results

Kulmar recommends independent retailers tune out some of the noise on paid search and advertising and instead focus on getting their organic search results as high as possible. You don’t have to pay for this, and doing it will ensure that the right customers actually connect with you off their own bat.

“It’s all about how you get smarter and more in touch with your customer,” she says.

When many brands think of paid search opportunities, Google Adwords will likely come to mind, but Kulmar says trends in the US suggest shoppers may rely less on Google in the future when it comes to discovering new products.

“One question that’s worth asking is what happens when Amazon moves to ‘voice search’,” she says.

Studies of US consumers are already suggesting that around 50% of shoppers conduct initial product searches from within the Amazon interface, rather than other search engines, Kulmar says.

Smaller operators need to keep this in mind, but should also remember the only thing they can control is their brand identity.

“In future it will be all about the importance of recommendations of others, and how that drives the sales of a product,” she says.

SmartCompany contacted Zara Australia but did not receive a response prior to publication.

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