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Apparels is largest category in online sales
Apr '08
In a year where retail industry sales are expected to experience sluggish growth, Americans will continue to flock to the Internet for clothing, computers, and even cars.

According to The State of Retailing Online 2008, the 11th annual Shop.org study conducted by Forrester Research, Inc. (Nasdaq: FORR) of 125 retailers, online retail will continue to be a bright spot in the industry with retail sales rising 17 percent this year to $204 billion.

Apparel ($26.6 billion), computers ($23.9 billion), and autos ($19.3 billion) will be the largest three sales categories.

As the number of people new to the Internet begins to wane, online retailers are constantly struggling between investing in strategies that retain current customers or 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.

“What's spearheading online retail sales growth is a tale of two shoppers that visit the web for very different reasons,” said Sucharita Mulpuru, Forrester Research principal analyst and lead author of the report.

“The casual shopper goes online to look for the best price, leveraging the transparency of the Internet to save money. However, more affluent customers appreciate the convenience of shopping online and are not necessarily looking for the best deal. Retailers would be wise to recognize there are significant opportunities within both audiences and should market to them accordingly.”

Forrester Research

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