Web Shoppers Sophistication Affects Retailers

Las Vegas, NV, September 19, 2007--As today's shoppers become more discriminating about their interactions online, the stakes are being raised for retailers to provide a consistently positive, more sophisticated experience.

According to the 150 retailers surveyed for the second part of The State of Retailing Online 2007, the 10th annual Shop.org study conducted by Forrester Research Inc., top priorities include fixing website design and performance issues, improving the efficiency of online marketing, and enhancing cross-channel integration. The report was released today at the Shop.org Annual Summit in Las Vegas.

"Today's online shopper is extremely Web-savvy and expects more than ever, forcing retailers to raise the stakes," said Scott Silverman, executive director of Shop.org. "Companies are investing in new features that will keep customers coming back, and homepages everywhere are getting a major facelift."

Fixing product detail pages will top retailers' website to-do lists for the next 12 months.

According to the survey, 88% of retailers plan to focus on improving content presented on product detail pages, with 80% adding alternative images, 72% incorporating lifestyle photography, and 63%integrating customer ratings and reviews.

Retailers are also focusing on their homepages, integrating top sellers and "what's new" sections, and making their websites more sophisticated, with dropdown menus and rollover lists in navigational areas.

To differentiate themselves from competitors, online retailers are also making customer service a priority, with 33%of companies planning to invest more in live chat and 53% 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," said Sucharita Mulpuru, Forrester Research senior analyst and lead author of the report. "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."

 Retailers understand the value of operating in multiple channels. Survey respondents said that 43% of catalog customers have also purchased from their online store and that 35% of online customers have also purchased from their bricks-and-mortar store.

Online retailers reported that in 2006, they dedicated on average 18% of their marketing spend to cross-channel sales, up from 13% in 2005. Typically, such tactics included direct mail initiatives such as catalogs and email programs to drive customers to local stores. However, more retailers are also leveraging direct print mail as a way to increase online sales. According to the study, 66% of retailers measure the success of a catalog by how it increases Web sales.

"The perception that catalogs are a dying breed could not be further from the truth," said Silverman. "For online retailers, catalogs are an incredibly important tool for acquiring new customers and providing current customers with their first look at new products. Retailers understand that many consumers get a catalog in the mail, then buy the item online."