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Thursday October 30th 2008

Online retail to grow strong with Web 2.0, despite economic downturn

Archived article dated Thursday October 30th 2008

According to a Forrester Research / Shop.org report, entitled the “State of Retailing Online Profitability, Economy and Multichannel”, e-tailers are expecting an average annual growth rate of 25 per cent this year alone, and 35 per cent say they expect to outperform previous estimates through the first half of next year.

On the other hand, “general retail - particularly in the current down economic climate - seems barely breathing,” according to an e-tail study from Retail Systems Research, entitled “Playing Well with Others: eCommerce's Evolving Rolein the Customer Experience”.

“Indicators, like those highlighted in these reports make it crystal clear that in today's market, a retailer's online channel is the linchpin for success and survival, “said David Lavenda, WorkLight's vice president of marketing and product strategy. “Web 2.0 capabilities today offer online retailers an opportunity to differentiate themselves by providing a more customer-centric shopping experience, that can also be shared with others via secure customer communities and customized social gadgets, he added.

The study goes on to reveal that one of the most pressing needs for retailers is to improve the shopping experience, urging online retailers to shift away from product-focused strategy and invest in customer-focused technologies. For example, over 2/3 of respondents said their “company sees great value in using viral or social networking as part of the online experience,” but less than 1/4 feel they are making effective use of these technologies. The main inhibitor to taking advantage of new opportunities is the lack of existing technology/infrastructure, with 70 per cent of respondents indicating that 'existing technology is preventing from moving forward with new solutions'. By enabling consumer Web 2.0 tools and services such as Facebook , desktop gadgets, iPhone, iGoogle and others, retailers can implement improved online shopping tools quickly and effectively. "As retailers prepare for the effect of the economic downturn across-the-board, it is absolutely essential to incorporate Web 2.0 into the shopping experience,” said Lavenda. “The Web 2.0 shopping experience offers huge opportunity to retailers who move quick to gain first-mover advantage.”

"It's against this backdrop that Web 2.0 is proving to be the perfect fit for retailers looking to maintain high revenue streams, improving their customer service levels and offer a personalised shopping experience," he said.

Tagged as: web 2.0

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