Multichannel Retailers Lead in Using Analytics

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Internet-only retailers trail multichannel retailers in initiatives to drive sales from repeat customers, according to a report released yesterday from WebTrends Inc.


The 2005 Online Retail Holiday Readiness Report from WebTrends, Portland, OR, is based on a survey of 242 online retailers -- including Internet-only, Internet-and-catalog, Internet-and-store and Internet, catalog and store retailers -- that was completed July 7-12.


Though retailers plan to use on-site features such as gift-idea centers and bestsellers lists this holiday season, 52 percent don't plan to use testing techniques to optimize customer loyalty campaigns and content, the report said. The exception is retailers with annual revenue of $100 million or more, as 60 percent of them plan to use testing this year.


However, examining responses by channel rather than revenue reveals that Internet-and-store retailers as well as Internet-only retailers trail others in applying testing to site content and marketing promotions, with 59 percent and 48 percent, respectively, having no plans to do testing.


In contrast, 41 percent of Internet-and-catalog companies indicated no plans to do testing while only 31 percent of Internet, catalog and store operations said the same.


Internet-only retailers displayed a similar aversion to segmentation, which can be key in targeting repeat buyers and tailoring offers by consumer preferences. According to the survey, 44 percent of Internet-only retailers said they didn't know whether segmentation is important to the success of their holiday season, that segmentation is minimally important or that it's not important at all. This compares with 38 percent for Internet-and-catalog retailers, 34 percent for Internet-and-store retailers and 25 percent for Internet, store and catalog retailers.


Other findings include that 23.5 percent of all retailers expect half or more of their holiday revenue to come from repeat customers. However, 30 percent of Internet-and-catalog retailers are banking on returning customers to drive half or more of their business this holiday season.


Special online discounts for repeat buyers show a dramatic rise in popularity among the promotions that retailers plan to use to generate sales from loyal customers. In 2004, 14 percent of retailers employed this strategy, according to a Bizrate.com survey, while this year 33 percent of retailers plan to do so.


Other strategies favored by retailers include free shipping, which 63 percent of retailers plan to offer, and value-added promotions, which 42 percent expect to offer.


Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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