• by Sarah Mahoney  @mahoney_sarah, May 5, 2009

A new survey shows that the tougher economy has online retailers sharpening up their marketing programs as never before, and that most believe this is an ideal time to steal customers from weakened competition.

The study -- conducted by Forrester Research for Shop.org, the online component of the National Retail Federation -- surveyed 117 leading online retailers, and found that online retailers are keenly aware that the endless growth of ecommerce has gone the way of Chrysler Corp.: About 54% are expecting overall retail growth to slow in the next 12 months, and 57% concede that the slowdown in consumer spending is already hurting their bottom line.

The good news is that the vast majority -- four out of five -- believe the Internet is better suited to withstand recessions than other retailing channels, with one-third saying they have captured greater market share because of the downturn. Tellingly, respondents say their conversion rates -- the percentage of browsers who actually turn into buyers -- is between 3% and 3.5%, as it has been for years.

Nearly a third say they have cut back on Web retail operations. Among the cost-cutters, 88% say they have cut back on hiring and staffing, and 56% are spending less on search. But 46% of the total are spending as planned, and a bullish 24% say they have actually increased their Web budgets to take advantage of new opportunities.

Of those who are upping their budgets, 80% say they are spending more on search, 65% are spending more on email, and 60% have hiked their social marketing spending. Historically, the survey notes, retailers that operate mostly online have placed less emphasis on keeping existing customers, and more on finding new ones. But in this economy, retention has become more important to them.

As a result, 88% of respondents say they are giving email a higher priority this year over last, and 71% plan to send segmented emails to customers based on stated preferences or purchase data. About 55% say they are using emails to highlight new product availability, 55% are using them to collect feedback, and 53% are using them to promote online-only sales.

"Because consumers continue to spend online, interactive marketing spend to drive web sales remains a lucrative investment," writes Sucharita Mulpuru, Forrester Research principal analyst and author of the report. "While other retail channels struggle, eCommerce managers have a unique opportunity to drive more sales and test different tactics that resonate with consumers."

Forrester has forecast that online retail sales in the U.S. this year will increase 11% to $156 billion.