Keep on truckin'

Despite anticipated sluggish retail growth, online retail will remain a bright spot with retail sales* (excluding travel).

It will rise 17 percent this year to $204 billion, according to The State of Retailing Online 2008, the 11th annual Shop.org study conducted by Forrester Research, writes MarketingCharts.

Apparel ($26.6 billion), computers ($23.9 billion), and autos ($19.3 billion) will be the largest three sales categories, projects The State of Retailing Online 2008: Marketing Report, the first of a three-part series based on the study.

As the number of people new to the internet begins to wane, online retailers are struggling between strategies that retain current customers and those that attract new ones, according to the report:

• Online retailers allocate 53 percent of their marketing budgets to online customer acquisition and 21 percent of marketing dollars to online customer retention.
• However, retailers are finding that traditional acquisition programs such as search engine or affiliate marketing may also serve as retention tools that attract existing customers as well as new shoppers.

Retailers report that search engine marketing remains the most effective way to reach new customers, citing 35 percent of sales coming from that initiative.

MarketingCharts has more findings in its coverage.

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*"Retail Sales" exclude travel and include the following categories: apparel, accessories, and footwear; appliances and tools, autos and auto parts, baby products, books, computer hardware, software, and peripherals, consumer electronics, cosmetics and fragrances, flowers and cards, food, beverages, and groceries, gift cards and gift certificates, home furnishings, jewelry, movie tickets, music and videos, office supplies, over-the-counter medicines and personal care, event tickets, pet supplies, sporting goods and apparel, and toys and video games.

These are not the same categories that the National Retail Federation tracks; therefore, the numbers are not comparable.