While Internet sales growth continues to outpace traditional retail sales, 54% of online retailers expect overall retail growth to slow during the next 12 months, and 57% acknowledge the economy is hurting their bottom line, according to the survey.
Although many retailers expect lower sales, however, four out of five surveyed online retailers think the web is better suited than other channels to withstand the recession and one-third say the downturn has helped them capture greater market share, the study found
Scott Silverman, Shop.org Executive Director, says "... Online retailers are trying to weather this economic storm by doing more with less, making smart spending decisions, and leveraging effective, affordable tactics like e-mail to grow their businesses."
30% of the 117 online retailers surveyed for the study are spending less than originally planned on web retail operations this year, according to the study. Among retailers cutting costs, 88% will scale back hiring and staffing plans and 56% will spend less on search.
However, retailers that see the economy as an opportunity to increase market share are proceeding with new initiatives. 46% have no plans to cut back original budgets while 24% will spend more on their online business than originally planned. Companies planning to spend more will increase investments in areas such as:
88% of retailers listed e-mail as a high priority for the year, largely to retain customers, the study found. 71% plan to send segmented e-mails to customers based on preferences and purchase data. 55% will use e-mails to highlight new product availability, while 53% will use e-mails to feature online-only promotions.
Other highlights of the report include:
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