Greetings, retail industry followers!

One of the most common questions we hear from retailers is "How do I succeed in the current economic environment?" This challenging situation only heightens the need for short-term return on investment (ROI) and quick wins to drive inventory turns and margin optimization. Here is a quick look at some of the key trends in retail around technology spending:

• Despite a weak economy, more eCommerce budgets will increase than decrease. Despite the weak economy, RoleView* analyst Carrie Johnson and Elizabeth Davis report that 38% of our eBusiness And Channel Strategy Professional Research Panel says their online division's budget will increase in 2009 over 2008. Thirty-six percent expect budgets to hold flat, and only 25% expect their online budgets will decrease.

• Mobile is a hot topic again. According to RoleView* analyst Sucharita Mulpuru, the rapid consumer adoption of the iPhone has encouraged retailers to once again consider the mobile-enabled commerce opportunity. The iPhone has made the Web something that previous smartphones failed to make it -- mobile friendly. An astonishing 89% of iPhone users access the Web, and more than one-half of them access the Web daily -- percentages greater than those proffered by the owners of any other mobile device.

• International eCommerce continues to be seen as an opportunity. JupiterView* analyst Zia Daniell Wigder reports that 60% of US site operators with international sites plan to increase spending in 2009. And international Web site operators' budgets are not marred by inertia: Less than one-quarter will have the same budgets in 2009 as in 2008, and most of those budgets are increasing.

• Despite continued spending on eCommerce initiatives, retailers are cutting back their overall IT budgets. RoleView* analyst George Lawrie reports that almost half of retailers had already cut back their IT budgets by July of last year, and almost three-quarters of retailers report that the slowdown will impact their budget in the next 12 months.

• Online retail experiences are getting better, but there is still room to improve. RoleView* analyst Adele Sage recently applied Forrester's Web Site Review methodology to the site experiences at 16 firms -- four each of the largest auto insurers, discount retailers, footwear manufacturers, and online travel agencies. While Expedia received the highest score, all 16 sites failed Forrester's usability test. The average score across all the sites evaluated was only -1.7, far below our passing grade of 25.

• A maturing set of solutions in eCommerce platform technology offers choice. In my RoleView "The Forrester Wave™: B2C eCommerce Platforms, Q1 2009" report I evaluated the top 10 eCommerce platforms available across the world today. These solutions represent a variety of models from licensed applications to hosted/managed solutions to SaaS offerings. Use our Forrester Wave™ model to weigh your criteria and understand the solutions that may be the best fit for your business. Also see my RoleView* "Market Overview: Full-Service eCommerce Solutions" report.

• While mobile is a hot topic, Forrester advises a tepid, focused response. Forrester believes the mobile commerce market is in its infancy, with usability concerns, pricing, and security impeding adoption. Sucharita Mulpuru advises retailers on the path forward and opportunities around mobile commerce in her report "The Emerging Opportunity In Mobile Commerce."

• Businesses with international ambitions should explore leveraging their domestic operations. With the global economy making international expansion a challenging proposition, international shipping provides a way for merchants to test international waters and diversify revenues without significant upfront investment. Zia Daniell Wigder's "Global Expansion Through International Shipping" report provides insights into the opportunity and services that can enable you to reach an international audience through domestic-based fulfillment and sites.

• When looking at IT investments, retailers need to look for quick wins. George Lawrie's "Retail Technology Investment Priorities" report examines the trends and influences on retail technology spending and recommends retailers focus on the low-hanging fruit, manage priorities with an eye to short-term ROI, and sequence their investments.

While overall belt tightening is a prudent course for retailers worldwide, many continue to invest in the critical technology and capabilities that will fuel growth and improve customer satisfaction.

Regards,
Brian Walker
brianwalker@forrester.com

* RoleView analysts are legacy Forrester analysts. RoleView clients have access to more than 17,000 reports containing Forrester's expert analysis. For more information, see our RoleView product page.

JupiterView analysts are legacy JupiterResearch analysts. JupiterView clients have access to expert advice for Marketing & Strategy professionals. To learn more about Forrester's acquisition of JupiterResearch, click here.

Research Referenced In This Issue Best And Worst Of B2C Site Design, 2009 (47412) Global Expansion Through International Shipping (53353) Global Web Site Spending: Benchmarking Spending On International Offerings (53352) Market Overview: Full-Service eCommerce Solutions (46831) Retail Technology Investment Priorities (54310) The Emerging Opportunity In Mobile Commerce (47881) The Forrester Wave™: B2C eCommerce Platforms, Q1 2009 (53651) The Recession's Impact On 2009 eBusiness Plans (53245) US eCommerce Forecast, 2008 To 2013 (53345)

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