Online Retailers Improve Web Sites, Customer Service to Remain Competitive

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 a Shop.org study conducted by Forrester Research, Inc., top priorities include fixing Web site design and performance issues, improving the efficiency of online marketing, and enhancing cross-channel integration.

Fixing product detail pages will top retailers' Web site to-do lists for the next 12 months. According to the survey, 88 percent of retailers plan to focus on improving content presented on product detail pages, with 80 percent adding alternative images, 72 percent incorporating lifestyle photography, and 63 percent integrating customer ratings and reviews. Retailers are also focusing on their homepages, integrating top sellers and "what's new" sections, and making their Web sites 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 percent of companies planning to invest more in live chat and 53 percent planning to enhance their guest checkout process within the next year.

In 2006, online retailers continued to allocate the majority (51 percent) of their marketing dollars toward online customer acquisition tactics and an additional 24 percent to online customer retention programs. Paid search continued to be the most effective marketing tactic for customer acquisition, and email marketing retained its position as the most effective — and budget-friendly — tool for customer retention. According to the survey, retailers find that emails about new products are more successful than simple transactional and sale messages. Seventy-three percent of retailers email customers about new products, and 51 percent rated the method as very effective. While Web 2.0 and Social Computing continue to receive a great deal of attention among senior marketing executives, the survey results indicated that these tools are very much in their infancy as marketing tools for retailers.

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