Ken Burke

During the economic downturn, marketers had to become smarter at e-commerce. Savvy marketers tested e-mail campaigns, offers, on-site merchandising and targeting. Now, as the economy recovers, they must build on what worked to gain competitive advantage, grow their brands and increase their customer bases.

In today’s economy, acquiring highly qualified customers while increasing the amount of products and services they purchase is of critical importance. By making small, manageable improvements, online merchants can increase the lifetime value of each customer, drive repeat purchases and create stronger customer loyalty.

After a challenging holiday season, merchants face seemingly paradoxical imperatives in 2009: Continue e-commerce growth while holding the line on expenses. Now more than ever, merchants must invest wisely to stay competitive, and continue to improve and innovate online.

It’s February. Winter still has us in its grip and apparently, so does the economic downturn. Fortunately, there are specific things online retailers can do to mitigate its effects. The other good news is that growth in the online channel still outpaces brick-and-mortar.

To combat the triple challenge of economic uncertainty, slowing market gains and seasonal swings, e-commerce merchants must shift focus to a previously neglected stage of the sales process: customer retention. Currently, online retailers allocate 53 percent of their marketing budgets to online customer acquisition and 21 percent of marketing dollars to online customer retention, according to Shop.org's State of Online Retailing Study for 2008. By building a base of loyal customers, merchants can smooth their averages by driving repeat business over time.

As the playing field levels for online retailers in terms of basic transactional capabilities—e.g., fast checkout processes, accurate shipping calculators, e-mail order confirmations—how can we increase sales and build competitive advantage in the years ahead?

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