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‘E-tailers’ poised to see green this holiday season
By Shelia Watson
Contributing Writer
When it comes to the news about online sales, it’s all good. In late November, the U.S. Department of Commerce reported that online retail sales in the third quarter of 2006 grew at four times the rate of total retail sales.
Overall, U.S. e-commerce in the third quarter reached $27.5 billion, which represents a 20.9% increase over the third quarter of 2005.
In comparison, total in-store retail sales for the third quarter of 2006 were up only 5.1% from a year ago.
The report also showed that online retail sales in the third quarter accounted for 2.8% of all retail sales, with online traffic continuing to grow and consumers expanding the categories in which they shop.
The news couldn’t be better as retail moves into its busiest time of the year. A recent America Online Shopping/Zogby poll reported that 80% of Web users in the United States plan to buy gifts online this holiday season.
The poll delved into why: 58% said online shopping saves time, 32% said they enjoy the ease of comparison shopping, 29% said they found items online that are not available in local stores and 24% said the value of free shipping was key.
Less of a factor was a concern over gas prices, with only 9% saying they shop online to save at the pump.
One-size-fits-all in online stores
It’s not only the Wal-Mart, Target and Sears Web components that are showing a profit online.
According to a study conducted in August by Forrester Research, small businesses are ripe for success with online retail.
More than 75% of online shoppers said they are likely to purchase gifts from small businesses.
The survey revealed that the features most important for an overall positive shopping experience include a secure online payment system (76%), ease in navigating the Web site (76%) and a simplified checkout process (58%).
Incentives that make a Web user most likely to want to buy include free shipping (90%), online discounts (69%) and a free or no-hassle return policy (64%).
Online marketing trends
Some of the online retail trends for this season include a shift away from price-based promotions toward e-mail marketing, search-engine marketing and search-engine optimization, according to the 2006 Online Retail Holiday Readiness report from WebTrends.
Reflecting this trend, the biggest increases in marketing spending for the holidays will be in e-mail marketing (52%), search-engine marketing (46%) and search-engine optimization (38%). The biggest decreases in spending will be in online banner ads (17%), print advertising (16%) and broadcast advertising (14%).
More than 80% of retailers use regular e-mails to build customer relationships, and the activity most retailers plan for the future is developing a database of clickstream-based information for campaigns targeted to individual interests.
Suggested items, gift idea centers and featured item pages remain the most popular site features to generate revenue from loyal customers, as well as the perennial favorites of personalized promotions and live chat customer support.
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