• by Jack Loechner , Staff Writer @mp_research, August 21, 2006

According to the latest study by Shop.org and Forrester Research, says Webtrends, the US eCommerce industry has experienced a compound annual growth rate of 33%. Forrester predicts that revenue in 2006 will continue to grow another 20% to top $200 billion. And, 41% of the retailers WebTrends surveyed said that the holiday season accounts for more than 20% of their annual revenue.

The Webtrends recent Online Retail Holiday Readiness Survey with over 300 retail professionals, found that overall, retailers surveyed ranked email marketing as the most important demand-generation activity for holiday success. In addition, 50% of the respondents said that visitor segmentation is important to the success of their online holiday season. Making sure that campaigns are targeted and relevant to customers is vital, says the report.

Email marketing to stimulate demand is the winner with ecommerce businesses, with Search Engine Marketing (SEM) and Search Engine Optimization (SEO) ranking second and third. Print advertising was ranked second and in-store promotions third to Internet and Store retailers, while traditional forms of demand generation such as broadcast advertising and coupons didn't make the cut. Online banner ads were also a lower priority for all retailers.

More than 23% of retailers will provide no special offers during the holidays. Last year, free shipping was a clear winner, with value-added promotions such as "free gift with purchase" running a close second. This year, twice as many retailers are opting to see what happens without any promotions at all.

28% of respondents will use a "special repeat buyer discount" to fuel repeat purchases from existing customers, down from33% from last year's survey. The inclination to refrain from providing special offers applies to current as well as new customers.

The most popular site features in 2006 are:

• 49% of retailers surveyed indicating they intend to use suggested items to generate revenue from loyal customers.
• 40% are planning a gift idea center
• 37% planning a featured item sales page

The biggest increases in spending, according to the report will be:

• eMail marketing (52%),
• SEM (46%)
• SEO (38%)

The biggest decreases in spending will be:

• online banner ads (17%)
• print advertising (16%)
• broadcast advertising (14%)

Some other key findings reported in the study include:

• 63% of retailers are relying on response and activity-based metrics like clickthroughs, page and product views to measure demand generation
• 27% aren't consistently measuring their demand generation activities at all
• 10% of retailers surveyed are using visitor-centric metrics like unique visitors and deferred conversions to measure these activities

For more on this report by Webtrends, please go here.