Online retailers shift focus amid struggling economy

Scottsdale, Ariz. The economy is forcing online retailers to change their marketing tactics in order to acquire and retain customers, according to findings from The State of Retailing Online 2009, the 12th annual Shop.org study conducted by Forrester Research.

According to the survey, half of respondents (54%) expect overall retail growth to slow during the next 12 months and 57% acknowledge the economic slowdown is hurting their company’s bottom line. But companies are still bullish about Web operations: Four out of five retailers think the Web is better suited than other channels to withstand the recession, and one-third said the downturn has enabled them to capture greater market share.

Under pressure from the economy, nearly one-third of companies (30%) are spending less than originally planned on Web retail operations this year. Among retailers cutting costs, most (88%) will scale back hiring and staffing plans, and slightly more than half (56%) will spend less on search.

Others see the economy as an opportunity to increase market share and are charging ahead with new initiatives. Almost half of retailers surveyed (46%) have no plans to cut back original budgets and will spend as planned on their Web business, while one in four retailers (24%) will spend more on their online business than originally planned. Companies planning to spend more will increase investments in several areas, including search (80% of respondents), e-mail (65%) and social marketing (60%).

In addition, a majority of retailers (88%) list e-mail as a high priority for the year, largely to retain customers, according to the survey. Almost three-fourths of retailers (71%) plan to send segmented e-mails to customers based on stated preferences or purchase data. More than half will use e-mails that highlight new product availability (55%), extend invitations to participate in surveys or garner customer feedback (55%) and feature online-only promotions (53%).