Online retailers using e-mail, social media to retain customers, market share during downturn

Online retailers are shifting their marketing from traditional advertising to less expensive tools like Facebook.com and Twitter and e-mail as they seek market share or just work to retain customers, according to an industry study being released Tuesday.

Conducted by Internet analysis firm Forrester Research for Shop.org — the online arm of the trade group National Retail Federation — the survey found that merchants believe online business is better suited to withstand an economic downturn than physical stores or catalogs, though they acknowledge challenges for both.

The study involved 117 online retailers polled between Feb. 18 and April 1.

The companies, which Forrester didn’t name, reported scaling back hiring and their increasingly expensive search marketing programs, which include paying for top billing in the results consumers see for their Web searches. Online merchants whose business is beating expectations will likely fuel much of the e-commerce investments in the coming months, the survey found.

About 30 percent of the surveyed retailers expect to cut their spending on Web operations for the year, while 24 percent said they would increase it and 46 percent said they would spend as planned, according to the study.

Online retailers said they are focused on e-mail marketing, which almost 90 percent listed as a top priority. But that doesn’t mean shoppers should expect to be bombarded with even more spam in coming months.

As for overhauling technology or developing programs where customers can pick up items ordered online from stores, half the retailers faring well said they would pursue such large initiatives this year.
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