Online retailers are investing for growth, according to a new study, which found that most are spending their money on acquiring new customers, and keeping the ones they have already.
Researchers from Coleman Parkes Research interviewed 100 decision makers from retailers turning over at least £3m for the Eccomplished eCommerce Innovation Index 2012. They found that 74% of online retailers were investing in retaining loyal customers, while most were also putting money into finding new customers. Some 60% were to do that through moving into new international markets, and 67% by introducing new sales channels.
In order to understand their customers, found the study, some 65% are planning to invest in analytics and performance optimisation in 2012. And 75% of retailers are looking to use analytics to determine which of their multiple touchpoints was responsible for a sale.
“Even in a mature online retail marketplace,” said Darren Hitchcock, VP Europe at RichRelevance, whose technology personalises shopping experiences, “established behaviours continue to be disrupted by new channels and devices, and competition for attention and market share is fiercer than ever. Clearly, retailers are responding to the new demands of increasingly connected consumers.”
He added: “Current growth in this category has been driven solely by consumers finding their way in the online space and multichannel retailers just meeting demand. Be prepared for hyper-drive as online grocers accelerate personalisation to target highly relevant recommendations, promotions, and advertisements that foster customer retention.”
Studying retailers’ online performance in 2011 and growth expectations for 2012, the study found that 46% of companies said their performance met expectations, 30% said it exceeded expectations a little and 12% said it exceeded expectations by some way.
In 2012, 37% of those quizzed said they planned to grow by between one and ten percent, while a third (33%) expected to grow by as much as 20%, and 20% to grow by up to 50%. In all, 10% expected to grow by more than 50%.
All said they would invest in innovation in 2012, spending on average a third of their annual budgets on innovation. The largest online retailers said they would spend an average of 36% of their total annual spend.
Steve Rivers, managing director of Intelligent Reach, said: “Overall, the picture is one of optimism and ambition – but backed by real investment in innovation.”
The study was commissioned by Eccomplished, which provides a free resource for research into online shoppers and retailers behaviour on behalf of members including RichRelevance, Intelligent Reach and SaleCycle.