Connect with us

Hi, what are you looking for?

New Products

Online Sales Expected to Climb Despite Struggling Economy

471044.gif

Online Retail Sales to Reach $204 Billion This Year According to Shop.org/Forrester Research Study

In a year where retail industry sales are expected to experience sluggish growth, Americans will continue to flock to the Internet for clothing, computers, and even cars. According to The State of Retailing Online 2008, the 11th annual Shop.org study conducted by Forrester Research, Inc. (Nasdaq:FORR) of 125 retailers, online retail will continue to be a bright spot in the industry with retail sales* rising 17 percent this year to $204 billion. Apparel ($26.6 billion), computers ($23.9 billion), and autos ($19.3 billion) will be the largest three sales categories. The State of Retailing Online 2008: Marketing Report, the first of a three-part series of reports based on the study, was released this morning at Shop.org’s Online Marketing Workshop in Scottsdale, AZ.

“From higher shipping costs to changes in consumer shopping habits, online retailers are not immune to the current economic climate,” said Scott Silverman, executive director of Shop.org. “But the fact that online sales will increase substantially this year demonstrates the resilience of the channel and is a testament to the value and convenience most customers find when shopping online.”

As the number of people new to the Internet begins to wane, online retailers are constantly struggling between investing in strategies that retain current customers or those that attract new ones. According to the report, online retailers allocate 53 percent of their marketing budgets to online customer acquisition and 21 percent of marketing dollars to online customer retention. However, retailers are finding that traditional acquisition programs such as search engine or affiliate marketing may also serve as retention tools that attract existing customers as well as new shoppers.

“What’s spearheading online retail sales growth is a tale of two shoppers that visit the web for very different reasons,” said Sucharita Mulpuru, Forrester Research principal analyst and lead author of the report. “The casual shopper goes online to look for the best price, leveraging the transparency of the Internet to save money. However, more affluent customers appreciate the convenience of shopping online and are not necessarily looking for the best deal. Retailers would be wise to recognize there are significant opportunities within both audiences and should market to them accordingly.”

According to the survey, retailers report that search engine marketing continues to be the most effective way to reach new customers, citing 35 percent of sales coming from that initiative. As a result, nearly all online retailers surveyed (90%) use pay-for-performance search placement, and 79 percent said they will make this tactic an even greater priority this year. Companies are also using offline marketing tactics to drive customers to the web, with catalogs and other direct mail pieces taking priority over methods like television and newspaper advertising.

Though free shipping offers have proven to get some consumers over the obstacle of shopping online in the past, the study showed that retailers’ are less interested in promoting free shipping options this year. While 85 percent of online retailers said they used some shipping with conditions promotions in the past, just 35 percent said that they would focus more on these types of promotions in 2008. Instead, retailers are eager to experiment with Social Computing initiatives to attract customers – 65 percent and 55 percent of retailers respectively said that social network advertisements and widgets would be categories of increased focus this year. However, Social Computing efforts to this point have been considered more effective for brand-building and less proven for driving revenue or sales conversion. Therefore, the report advises retailers to continue investments in proven techniques like email marketing and free shipping promotions to drive sales.

The State of Retailing Online 2008: Marketing Report is currently available to Shop.org members and can also be purchased directly at http://www.shop.org/soro08. Forrester RoleView clients will be able to access the report directly on http://www.forrester.com as part of their subscription service starting on May 7, 2008.

Shop.org and Forrester will release its Merchandising study, which will examine tactics to improve conversion rates and customer experience optimization investments and plans, in July at its Online Merchandising Workshop. In conjunction with the Annual Summit in September, Shop.org will release its annual Profitability report, which will explore company organization, sales and metrics, operations and fulfillment, and expansion into markets outside the U.S.

About Forrester Research
Forrester Research, Inc. (Nasdaq:FORR) is an independent technology and market research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. For more than 24 years, Forrester has been making leaders successful every day through its proprietary research, consulting, events, and peer-to-peer executive programs.

About Shop.org
Shop.org, a division of the National Retail Federation, is the world’s leading membership community for digital retail. Founded in 1996, Shop.org’s 700 members include the 10 largest retailers in the U.S. and more than 60 percent of the Internet Retailer Top 100 E-Retailers. It’s where the best retail minds come together to gain the insight, knowledge and intelligence to make smarter, more informed decisions in the evolving world of the Internet and multichannel retailing. Shop.org programs and activities include benchmarking research, events and networking communities.

Advertisement. Scroll to continue reading.

* “Retail Sales” exclude travel and include the following categories: apparel, accessories, and footwear; appliances and tools, autos and auto parts, baby products, books, computer hardware, software, and peripherals, consumer electronics, cosmetics and fragrances, flowers and cards, food, beverages, and groceries, gift cards and gift certificates, home furnishings, jewelry, movie tickets, music and videos, office supplies, over-the-counter medicines and personal care, event tickets, pet supplies, sporting goods and apparel, and toys and video games. These are not the same categories that the National Retail Federation tracks; therefore, the numbers are not comparable.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement

Latest Products

Rega ND7 MM Phono Cartridge Lifestyle

New Products

At $795, the Rega Nd7 is the world's first phono cartridge to use ultra-high powered Neodymium magnets in a moving magnet design.

Keith Monks ReduxTwo Record Cleaning Machine Keith Monks ReduxTwo Record Cleaning Machine

New Products

Originally designed for the BBC, the Keith Monks ReduxTwo offers professional grade record cleaning with zero recontamination.

Burmester x Robbe & Berking Limited Edition BC150 Loudspeaker Burmester x Robbe & Berking Limited Edition BC150 Loudspeaker

Floorstanding Speakers

This handcrafted, limited special edition high-end sound system includes silver-plating and the fine woods of the luxurious oak Bar Trolley.

Arendal Sound 1528 Loudspeaker Series in Polar White Arendal Sound 1528 Loudspeaker Series in Polar White

Floorstanding Speakers

The best speakers from Arendal Sound have arrived, but their new flagship towers will set you back $9,500/pair USD.

Acoustic Energy AE Subwoofer in White and Black Acoustic Energy AE Subwoofer in White and Black

New Products

At $699, the Acoustic Energy AE Sub is 12-inch subwoofer packing 250-watts of power with low bass extension down to 26Hz.

Chord Company Clearway HDMI AOC Cable Chord Company Clearway HDMI AOC Cable

Audio Cables

At $160 to $500, this hybrid HDMI cable uses copper and optical to deliver 48 gbps of performance in long lengths up to 20...

Gift Ideas?

Amazon Prime Day Gift Guide 2024

Gift Guides

If you missed Amazon Prime Day there are still some of great deals on SVS 16-Ultra subwoofers, Roku Pro TVs and more.

You May Also Like

Advertisement

ecoustics is a hi-fi and music magazine offering product reviews, podcasts, news and advice for aspiring audiophiles, home theater enthusiasts and headphone hipsters. Read more

Copyright © 1999-2024 ecoustics | Disclaimer: We may earn a commission when you buy through links on our site.



SVS Bluesound PSB Speakers NAD Cambridge Audio Q Acoustics Denon Marantz Focal Naim Audio RSL Speakers