March 12, 2002, 12:00 AM

10 ways e-retailers are improving profitability, according to the DMA

Online retailers are focusing on profitability, adopting techniques and technologies that made them successful offline, the DMA reported today in releasing the results of a study of 100 leading e-retailing sites.


Retailers selling online are focusing on profitability, adopting many of the techniques and technologies that have made them successful offline, the Direct Marketing Association reported today in releasing the results of a study of 100 leading e-retailing sites.

"After nearly a decade of learning what works in the online marketplace, retailers are getting back to basics and focusing on factors that build the bottom line. Retailers are putting emphasis on merchandising tactics such as search technologies, product enhancement features and customer services that actually increase sales, and they are placing less emphasis on features such as community that do not guarantee a solid return," said H. Robert Wientzen, president & CEO of the DMA.

"Smart merchandising makes senses for merchants and a return to retail and catalog fundamentals is delivering results for e-commerce merchants," said Lauren Freedman, president, The E-tailing Group Inc., Chicago-based consultants that conducted the study for the DMA.

Here are the top 10 things that The E-tailing Group says online retailers are doing to build their bottom lines:
--Developing content that provides detailed information for consumers to make a buying decision.
--Using interactive technology to add value to the online shopping experience and increase sales, such as zoom, color change and 3-D technologies.
--Minimizing the number of clicks to checkout and improving "quick-to-shop" times to avoid cart abandonment.
--Communicating with customers via targeted e-mails that include merchandising tactics and providing timely accurate responses to customer service inquiries.
--Investing in improved search technology that allows consumers to search by multiple factors.
--Offering relevant cross-sells and up-sells throughout the site.
--Offering timely gift services, including gift centers and comprehensive gift searches.
--Providing real-time online information about product availability and order status.
--Structuring promotional offers without forfeiting profitability, such as offering free shipping based on a minimum order.
--Integrating multi-channel operations for customer convenience and cost savings.

The study, the "Merchandising Scan," was conducted during the fourth quarter of 2001. It surveyed 100 e-commerce sites in 16 product categories. Each site was scanned to locate 102 features and functions within nine merchandising tool sets, including search, profiling, established and promotional merchandising, custom content, community, cross-channel, gifting, product enhancement, and customer service.


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