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With 53% of online shoppers early technology adopters, despite constituting just 36% of the North American population – retailers are feeling compelled to provide a consistently positive, more sophisticated shopping experience, according to the tenth annual Shop.org study conducted by Forrester Research.

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Among the top priorities reported by the 150 retailers surveyed for the second part of “The State of Retailing Online 2007” are fixing website design and performance issues, improving the efficiency of online marketing, and enhancing cross-channel integration.

The following are some key findings from the study.

Focusing on the basics

  • Fixing product detail pages will top retailers’ website to-do lists for the next 12 months: 88% of retailers plan to focus on improving content presented on product detail pages, with 80% adding alternative images, 72% incorporating lifestyle photography, and 63% integrating customer ratings and reviews.
  • Retailers are also focusing on their homepages, integrating top sellers and “what’s new” sections, and making their Web sites more sophisticated, with dropdown menus and rollover lists in navigational areas.
  • To differentiate themselves from competitors, online retailers are also making customer service a priority, with 33% of companies planning to invest more in live chat and 53% planning to enhance their guest checkout process within the next year.

Where marketing dollars go

  • In 2006, online retailers continued to allocate the majority (51%) of their marketing dollars toward online customer acquisition tactics and an additional 24% to online customer retention programs.
  • Paid search remained the most effective marketing tactic for customer acquisition, and email marketing retained its position as the most effective – and budget-friendly – tool for customer retention.
  • Retailers find that emails about new products are more successful than simple transactional and sale messages:
    • 73% of retailers email customers about new products.
    • 51% rated the method as very effective.
  • Web 2.0 and social computing are very much in their infancy as marketing tools for retailers.

Aligning online and offline channels

  • Retailers understand the value of operating in multiple channels: On average, 43% of catalog customers have also purchased from retailers’ online stores and 35% of online customers have also purchased from their bricks-and-mortar store.
  • Online retailers reported that in 2006 they dedicated on average 18% of their marketing spend to cross-channel sales, up from 13% in 2005. Typically, tactics included direct mail initiatives such as catalogs and email programs to drive customers to local stores.
  • However, more retailers are also leveraging direct print mail as a way to increase online sales: 66% of retailers measure the success of a catalog by how it increases web sales.

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