E-retailers are spending on upgrades despite down economy, study says

E-retailers are spending on upgrades despite down economy, study says

Category

E Commerce

Despite a challenging economic climate, many online merchants show little sign of paring down their e-commerce spending, according to a new report, “No Retreat – Investing in e-commerce despite the times,” from The E-Tailing Group.

On a scale of one to 10, e-retailers averaged a seven when asked to rate how aggressive their e-commerce spending plans are.

Technology was a top spending priority, with 71% of e-retailers reporting they have a major meeting at least once a year to review and plan for technology investments. 30% of merchants said they monitor technology spending continuously to make sure they are within budget, while 30% do so quarterly, 17% monthly and 8% on an as-needed basis.

High on the list of priorities to improve web sales is more targeted e-mail programs, cited by 71% of those interviewed. Additional top spending plans include site redesign or upgrades (67%), adding or improving site search (65%), enhancing online merchandising features (65%), and implementing cross-sell and up-sell technologies (58%).

The report also found a significant number of senior-level e-retail executives are dissatisfied with the return on investment in the web channel. Only 37% rated themselves very satisfied with the ROI generated by their e-commerce units – compared to 47% in 2007. The percentage of those somewhat satisfied rose to 49% this year from 36% last year. 10% said they felt neutral about e-commerce ROI, down from 11% last year; 6% were somewhat dissatisfied, up from 5% last year, and 2% were very dissatisfied, compared to 1% in 2007.

“Satisfaction is declining with a maturing channel and a flatter growth curve,” says Lauren Freedman, the author of the report and president of The-E-Tailing Group. Freedman`s audio-visual presentation at IRCE 2008 is available on CD-ROM.

The report was commissioned by consultancy Acquity Group and uses data gathered for The E-Tailing Group’s 2008 Annual Merchant Survey.

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