Online retailers: focus on current customers

The spending slowdowns of this recession have deeply affected online retailers – although their sales still grew by 13.3% in 2009, and are forecast to grow an average of 11% annually during the next four years.

The spending slowdowns of this recession have deeply affected online retailers – although their sales still grew by 13.3% in 2009, and are forecast to grow an average of 11% annually during the next four years.

Brick-and-mortar retailers would call such performance ‘glory days’ for their channels, but they’d be missing the point of how the economic downturn has blunted growth of new online consumers and has made the current crop far more demanding.

For example, reports the new study, Internet Retail Trends 2010: Ten Actions For Your Business by Webloyalty and Verdict Consulting:  
•    In 2009 more than 60% of shoppers will have shopped on the Internet, and that will grow to 66% by 2012, but this growth rate pales with that of the prior five years.
•    Online shoppers seek the best prices, the steepest discounts and added value.

“The recession has certainly caused online shoppers to alter their purchasing habits,” said Neil Saunders, consulting director, Verdict Consulting.

This is where the study authors and SupermarketGuru.com see the opportunity for retailers to differentiate. Since one growing trend is shoppers’ use of two or more channels to complete a sale (18.7% in 2009, forecast to double to nearly 40% by 2020), food retailers in particular can combine brick-and-click strategies to fully engage shoppers who are planning more of their store trips with online research.  

Coupons, recipes, dietary advice and frequent shopper exclusives are all relevant to savings and health and could be effective at making a retailer website and stores compelling sources for how to live frugally and live well. Online games and family-oriented contests can entertain and build continuity. Each of these enhance the marquee retail brand. 

The study finding that underlies this approach: the new-customer slowdown forces retailers to drive repeat business by “shifting marketing spend away from attracting new customers and focusing on adding value for existing customers.”

Among 10 trends for 2010 cited in the study:  Since basket abandonment is here to stay, the use of clear, accurate and detailed product information could reduce its frequency. Since customers will become ‘channel-blind’, retailers should offer multiple touchpoints and keep branding consistent.