April 18, 2005, 8:28 PM — This week's highlighted research:
Research and Markets. "New opportunities in online consumer selling examined."
Forrester Research. "Trend 2005: Online retail."
Nielsen//NetRatings. "Online retail report card: Highest conversion rates amongst non-brick-and-mortar retailers."
Emarketer. "Retail industry: Online advertising spending and trends."
Ever since the first online business hung out its virtual shingle, the dotcom business model has been changing. What worked ten years ago won't work today; what works today may not work next month. When starting a commercial web site, the first and most important thing to do is to define its purpose. It's not always as obvious as one may think.
Ultimately, the purpose of most businesses, and the purpose of every process, is either directly or indirectly to sell something. The commercial web site may attempt to sell things directly. Others may use the site as a means of providing information and customer service to existing customers, and still others may use the web as a way of encouraging customers to research products before making the actual purchase in a brick-and-mortar store.
Research and Markets' report recommends that retailers combine all elements, integrating channels to allow customers to combine in-store, catalog, and online shopping. The report notes that consumers have become empowered by the Internet. A customer may choose to buy from you or pass you by, without ever having set foot in your store. As such, there are new rules for engaging the customer, and retailers must meet the customer on their own terms.
Online retail is maturing, however. Forrester's report notes that this year, online retail will slow, but will become fiercely competitive. In the early days of online commerce, the customer demographic was young and wealthy. Today's online shopper incorporates more of America's mainstream. Shaky consumer confidence in the offline world reflects in the online venue as well. Online sales are still growing year-over-year, but nowhere near as fast as they once were. The only way to survive is to innovate. Forrester makes some excellent suggestions as to how to set yourself apart from the online pack. The report notes the widespread acceptance of broadband, for example, and suggests that broadband-based applications will significantly improve your customers' shopping experience. Similarly, data-driven selling online will help guide your customers to the most appropriate decision.