As today's shoppers become more discriminating about their interactions online, the stakes are being raised for retailers to provide a more consistent, and positive, online experience, and retailers have taken note. According to Forrester Research's "The State of Retailing Online 2007" study (its 10th annual), the top priorities among the 150 retailers surveyed include fixing Web site design and performance, improving the efficiency of online marketing, and enhancing cross-channel integration.
Fixing product detail pages will top retailers' Web site to-do lists for the next 12 months. According to the report, 88 percent of retailers plan to focus on improving content presented on products, with 80 percent adding alternative images, 72 percent incorporating lifestyle photography, and 63 percent integrating customer ratings and reviews. Retailers will also focus on their homepages by integrating top sellers and "what's new" sections, and will make their sites more sophisticated via dropdown menus and rollover lists in navigational areas, according to Sucharita Mulpuru, a senior analyst with Forrester Research, and lead author of the report.
To differentiate themselves from competitors, online retailers are also making customer service a priority, with 33 percent of companies planning to invest more in live chat and 53 percent planning to enhance their guest checkout process within the next year. "It's encouraging to see more retailers planning to integrate customer feedback loops into their sales processes," Mulpuru says. "Many retailers have been relying on site analytics data, which is strong at reflecting paths-to-purchase but typically weak at highlighting vulnerabilities or opportunities for improvement."
Marketing continues to drive the majority of online spending, as 51 percent of retailers will continue to allocate the majority of their marketing dollars for online customer acquisition tactics and an additional 24 percent to online customer retention programs, according to the report. Paid search continues to be 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. According to the survey, retailers find that emails about new products are more successful than simple transactional and sale messages, with 73 percent of retailers emailing customers about new products. And while Web 2.0 and social computing continue to receive a great deal of attention among senior marketing executives, the survey indicated that "these tools are very much in their infancy as marketing tools for retailers," Mulpuru says.
Retailers are also improving their ability to merge their online and offline worlds, with multichannel initiatives taking increased importance within organizations. Survey respondents stated that 43 percent of catalog customers have also purchased from their online store and that 35 percent of online customers have also purchased from their brick-and-mortar stores. Retailers spent 18 percent of their marketing on cross-channel sales, up from 13 percent in 2005. "Finally, multichannel retailers are in a position to label themselves channel agnostic," Mulpuru says. "The old nomenclature that catalogs are a dying breed could not be farther from the truth. That speaks to the fact that retailers understand the value of operating in multiple channels, and are adopting their processes to meet the needs of the consumers."
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