DM News

June 16, 2009

The down economy is still top-of-mind for retailers and consumers, according to attendees at the Internet Retailer Exhibition and Conference in Boston this week.

"The economy is what everyone is talking about first," said David Fry, CEO at Fry, about his meetings at the show.

Still, the overall mood is upbeat at the show thanks to the appearance of several new exhibitors, including Alibaba.com and Bing.

"I'm so happy to see Bing here because it is a huge new advertiser," said Chris Paradysz, CEO at PM Digital.

"Clearly consumers are behaving very differently" because of the current economic situation, said Giani Fulgoni, chairman at ComScore, during a presentation Tuesday morning.

Consumers aren't spending money like they used to and the question still remains as to whether this is a permanent change or not, Fulgoni continued.

A recent survey from ComScore showed that consumers making between $50,000 and $99,000 a year account for the majority of online sales. However, the growth rate for this segment is only 2%. For consumers who are 45 years or older and making over $100,000, sales are flat.

Online sales still continue to gain market share from offline retail as total retail sales decline, Fulgoni said.

As consumers save more, online coupons have emerged as an important category. In March, there were 30 million unique people per month visiting coupon sites, up 30% over last year, according to ComScore. While 90% of all coupons are still distributed through FSI's, Fulgoni feels we could be at "the tipping point where coupons move from offline to online."

Retailers are looking to invest in the online customer experience, Fry said, including real-time inventory and integration of offline and online operations.

Retailers are also interested in investing in the look and feel of their Web sites with the goal of making them less static, said Fry. This could mean being able to click on a product, complete a transaction and find related items all without leaving a single Web page.

"E-commerce has matured to the point where just because you have a site, you aren't going to get 20% growth any longer," said Fry.

Customer reviews are another site experience that retailers are interested in, said Neal Creighton, president and CEO at RatePoint.

He pointed out that many of the major players in the category were present at the show, including Bazaarvoice, MyBuys and PowerReviews.

"The reviews market is still an emerging market and it's good to see the competitors here," he said.

RatePoint, which launched in 2007 offering retailers a way to enable consumers to review their company and manage negative reviews, launched a solution for product reviews at the show.

Retailers are also investing more in online marketing, particularly search, said Paradysz. One of the agency's clients will move all of its billboard and print advertising for the 2009 holidays online.

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