April 30, 2002, 12:00 AM

55% of online retailers made profit on web sites last year, says the DMA

The profits that 55% of online retailers made are the result of shifting focus to improving the online customer experience and combining online and offline techniques.


The majority--55%--of direct marketers who have e-commerce sites earned a profit on their web operations last year, says the new State of the E-commerce Industry Report 2001-2002 from the Direct Marketing Association released today.

The profits are the result of e-retailers shifting focus from marketing and developing web sites to improving the online customer experience, combining online and offline techniques to improve profitability and using e-mail marketing as a customer retention tool, the DMA says. Compared to last year, average online revenue per company increased by more than $1 million, the DMA says. Among the offline techniques that online marketers adopted last year were real time inventory and quicker customer service response times.

The report found that consumers are hopping back and forth among catalogs, retail stores and Internet sites, with the majority indicating that they conduct their research online before buying offline and vice versa. As a result, marketers are using a combination of online and offline techniques to drive traffic to their web sites. Direct mail, which 58% cited,, e-mail, 56%, print ads, 43%, and search engine optimization, 41%, were the most frequently used methods to generate online traffic.

"In the past, web marketers failed to recognize the value of other marketing channels such as catalogs and direct mail,” said H. Robert Wientzen, president and CEO of the DMA. "A growing number of marketers have now learned that online is just one piece of the whole picture and that they must integrate their online and offline operations in order to succeed."

Among other findings:
--89% of web-based companies said their customer service reps and telephone marketers responded to customers` requests within 24 hours.
--85% of consumer marketers reported that providing consumers with product/service information for comparison shopping and making educated buying decisions was the primary purpose of their web site.
--75% of web marketers anticipate investing more money in interactive media over the next three years.
--83% expect interactive media to increase their revenue. 51% indicated this increase would range from 6-25%.
--58% of companies who created separate online dot-com operations are bringing them back in-house to ensure a seamless experience for the customer.

The DMA`s State of the E-Commerce Industry Report 2001-2002 was conducted by The DMA in cooperation with the Association for Interactive Marketing during the fourth quarter of 2001. More than 700 companies involved in direct and interactive marketing participated in the report.


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