January 11, 2007, 12:00 AM

Top choice for e-commerce investment is customer loyalty, study says

When research and advisory firm Aberdeen Group last fall asked more than 120 retail industry companies to name their priority in developing e-commerce technology over the next 12-24 months, the largest group—46%—cited customer loyalty programs.

Paul Demery

Managing Editor, B2B E-commerce

 

When research and advisory firm Aberdeen Group last fall asked more than 120 retail industry companies to name their priority in developing e-commerce technology over the next 12-24 months, the largest group-46%-cited customer loyalty programs.

“Customer loyalty programs are atop the list for all retailers,” Aberdeen says in the report, “Clicks to Customers Benchmark Report: The Real ROI in B2C eCommerce,” which was released this month. The 46% planning to develop loyalty programs have expressed “the need to deliver to its customer base in order to improve sales and increase order size,” the report adds.

The report also notes, however, that among “best-in-class” online retailers, customer loyalty programs were cited as a priority by only 35%--placing loyalty programs in fifth place behind web 2.0 technology, alerting programs, recently-viewed products, and wish lists or gift registries. The report defines best-in-class as retailers with year-over-year comparable online sales growth from 10% to over 100%; web site visitor-to-sales conversion rates of 8% to over 25%; and annual increases in average online order value from 26% to over 100%.

Plans for web 2.0 technology, however, also coincide with expectations for improved customer loyalty, Aberdeen says. “No doubt, these retailers are seeking methods to attract new audiences, gain their attention and keep them coming back to the online stores for more,” the report says.

Web 2.0 technology, including Rich Internet Applications like AJAX and Flash development tools, are used to make web sites more interactive with faster-loading images and features such as shopping carts.

 

 

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