The State of Online Retailing 2008

[mandy]

today Forrester research (Sucharita Mulpuru is the analyst) came out with a joint report/survey with the great folks at Shop.org (I/we are an active member FYI).

The headlines of the report are good news for internet retailers:

    * Forrester sees e-commerce growing at 17% y/y in the US (This is good because comscore is starting to talk about 14% and maybe lower).  I'm an optimist and think that in early 09 the pundits will update the data to be more like 20%
    * This puts e-commerce at $208B for 2008, up from $174 in 07
    * e-commerce represents 7% of retail.
    * search engine marketing (what I call paid-search) drove 35% of sales and is still the top channel for retailers
    * 65% of retailers are experimenting with social networks
    * Forrester is predicting that growth will be driven by the computer, CE, auto and apparel categories.
    * Retailers spend $.50/click on average for paid-search and see $8.47 in incremental revenue (that's a weird metric)

full article (Wingo's analysis of the ETR of various channels is the highlight of the article): http://ebaystrategies.blogs.com/ebay_str...reste.html

IR on the report:

“Even in 2008, when retailers in general are expected to encounter challenges with growth due to uncertain or adverse economic circumstances, we project that online retail will continue to erode market share from other channels,” the report says. Forrester has reported separately that, although 61% of U.S. online shoppers expect the economy to worsen in the next year, 85% say they will spend the same or more online in the next year...

full article: http://www.internetretailer.com/dailyNews.asp?id=25984

More from Auctionbytes:

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...

full article: http://www.auctionbytes.com/cab/abn/y08/m04/i09/s03

more:

For online retailers, search and e-mail marketing continue to be the most popular tactics, though they are becoming increasingly interested in social networks and video, a new study indicates. That shift in tactics could be a risky endeavor, however, caution executives involved with the study.

According to a Shop.org survey of 125 online retailers conducted by Forrester Research, 90% of them participate in paid search and 92% rely on e-mail marketing. By comparison, just 26% use social networks or micro-sites, while only 21% employ online videos. The coming year could see a shift to new advertising tactics...

full article: http://adage.com/digital/article?article_id=126253

You can order the full survey here: http://www.shop.org/soro08/