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.
The
National Retail Association is forecasting $204 billion in retail sales over the Internet in 2008, while the rest of the retail industry expects sluggish growth.
According to The State of Retailing Online 2008, the 11th annual Shop.org study conducted by Forrester Research, Inc. online retail will continue to make a strong showing in the industry with retail sales rising 17 percent this year.
As more and more businesses become aware of the Web’s marketing powers, they ultimately end up with the budgeting question, “do I spend my money on new customer acquisition or do I spend it on servicing and maintaining my existing customer base?”
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.
According to the survey, retailers report that search engine marketing continues to be the most effective way to reach prospects. Businesses participating in the survey cite over 35 percent of their sales are driven by that type of marketing. Companies are also using offline marketing strategies to drive customers to the Web.
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