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CURRENTS
Online Retailers Shift Tactics
HE ECONOMY is forcing web retailers to change Almost half of retailers surveyed have no plans to cut
their marketing tactics, in order to acquire and back original budgets, and will spend as planned on their web
Tretain customers, according to fi ndings from, Th e business, while one in four retailers will spend more on their
State of Retailing Online 2009, the 12th annual Shop.org web business than originally planned. Companies planning to
study conducted by Forrester Research Inc. Th e survey of 117 spend more will increase investments in several areas. Eighty
online retailers also found that while the number of compa- percent will invest more on search, 65 percent will beef up
nies focusing on customer retention has nearly doubled in the emailing, and 60 percent will invest in social marketing.
past year, many retailers see the recession as an opportunity Despite the focus on customer retention, many retail-
to capture market share from weakened competition. ers, primarily multichannel retailers, say their eff orts at cus-
While Internet sales continue to outpace traditional tomer acquisition will be higher this year than last year. But
retail sales, companies are realistic about current challenges. for those retailers that operate primarily online, customer
According to the survey, half of respondents expect overall retention, which has historically been a distant second goal
retail growth to slow during for this group, is now criti-
the next 12 months, and 57 cal. According to the survey,
80% Will Increase Spending on Search.
percent ack nowledge the a majority of retailers (88
65% Increase Emails.
24%
economic slowdown is hurt-
60% Investing More in Social Marketing
Increasing
percent) list email as a high
Online 46%
Spending.
ing their company’s bott om
Staying With
priority for the year, largely
Original Budget.
line. Th at said, companies are
30%
to retain customers. Almost
Cutting
bullish about web operations.
88% Scaling Back Staff and Hiring.
Online
three quarters plan to send
Spending.
Four out of fi ve retailers think
56% Will Spend Less on Search.
segmented emails to custom-
the web is bett er suited than ers based on stated prefer-
other channels to withstand
Increased Focus on Emailthe recession, and one third
71% Sending Targeted Email to Customers.
say the downturn has enabled them to capture greater market
share. Illustrating the resilience of the web, retailers report
55% Emails to Highlight New Products.
that their conversion rates continue to hover between three
55% Survey Invitations.
and 3.5 percent, as they have for years.
“Retailers everywhere are trying to get their arms around
53% Emails for Online Only Promotions.
a pullback in consumer spending, and online retailers are no
exception,” said Scott Silverman, executive director of Shop.
ences or purchase data. In addition, more than half will use
org. “Online retailers are trying to weather this economic
emails that highlight new product availability, and extend
storm by doing more with less, making smart spending
invitations to participate in surveys or garner customer feed-
decisions, and leveraging eff ective, aff ordable tactics such
back; and 53 percent feature online only promotions.
as email to grow their businesses.” Under pressure from
“Because consumers continue to spend online, interactive
the economy, nearly one third of companies are spending
marketing spending to drive web sales remains a lucrative
less than originally planned on web retail operations this
investment,” said Sucharita Mulpuru, Forrester Research
year. Among retailers cutt ing costs, 88 percent will scale
principal analyst and author of the report. “While other
back hiring and staffi ng plans. Slightly more than half will
retail channels struggle, ecommerce managers have a unique
spend less on search. Others see the economy as an oppor-
opportunity to drive more sales and test diff erent tactics that
tunity to increase market share, and are charging ahead with
resonate with consumers.”
new initiatives.
Find this story in our complete article archive at: www.wholesalecentral.com/Wholesale–News
16 August 2009
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