January 31, 2011, 3:10 PM

E-retailers project higher tech spending

62% of online retailers plan to increase technology spending in 2011, Forrester says.

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62% of e-retailers say they will increase or significantly increase their technology budgets this year, up from 57% in 2010, according to a survey data from Forrester Research Inc. 5% of e-retailers say they will cut costs, the same percentage as last year.

The 2011 Online Retail Technology Investment Outlook is based on survey responses from 63 U.S. online retailers. Survey respondents were asked about their technology investment priorities for 2011. Respondents could select more than one answer.

The survey results show how e-retailers’ investment priorities are shifting this year. Integration with such back-end systems as order management and accounting systems was the leading spending priority, cited by 63.5% of respondents. In 2010, only 31.6% of retailers surveyed listed back-end integration as a priority.

For 2011, 52.4% of respondents said they consider investing in their e-commerce platform a priority, compared with 48.8% in 2010, Forrester says. E-commerce platforms manage the look and content of an e-commerce site and process transactions, while back-end systems support business management processes like accounting.

The report also shows the growing importance of the mobile channel. Mobile site investment is a priority of 52.4% of this year’s survey respondents, up from 18.6% in 2010.  Meanwhile, 24% of survey respondents plan to change or upgrade their e-commerce platform within the next 18 months, Forrester says. The research firm had no comparative data for 2010.

Nearly half (48%) of the respondents said their online stores are supported by e-commerce platforms built and maintained in house. 24% use vendor-provided platforms but host them internally, Forrester says in the report. The rest use open-source platforms and commercial applications hosted by other companies.

However, 59% of the e-retailers responding to the survey say they are interested in using software-as-a-service products or services hosted by vendors. “While a majority of online retailers use internal staff to support e-commerce platforms today, increasingly e-commerce executives look to shift toward externally supported solutions,” writes Forrester analyst Brian K. Walker in the report.

Search marketing remains a priority this year, named by 78% of respondents, the same rate as last year. Site usability and site design, however have taken on more importance, the survey results suggest. 70% of respondents consider each area a priority in 2011, up from 56% and 60%, respectively, in 2010. Web analytics also is becoming more important for online retailers. 65% consider it a priority for 2011, while 52% said it was a priority in 2010. 

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