Greetings. Another quarter, another $33 billion in US eCommerce sales -- that's up 36% from Q1 2003, as the online retail juggernaut keeps rolling.

My colleague Carrie Johnson and I have been analyzing US eCommerce for many years, and we are actively involved in Shop.org (more than 300 companies belong to this organization). In fact, we just spent a few days with 200 eCommerce execs at the Shop.org "Best Practices in Online Marketing" workshop. In case you missed it, here are a few highlights.

Search engines keep spawning. First there was HotBot, then AltaVista, then Inktomi, then . . . well, what did you use before Google? Turns out shoppers love using search engines to find products, and Google, Yahoo!, BizRate and others continue to win fans among retailers that like their pay-for-performance models. But just when retailers think they have figured out how to use search engines to drive shoppers to their stores, another engine launches: This month, it's Amazon's A9 -- a search technology subsidiary that just might change the way shoppers find products. (You've been warned: Watch that space.)

Amazon and eBay keep sprawling. Online shoppers are spending plenty at these behemoths -- both chalked up big first quarters thanks partly to their great shopper demographics. But how do retailers feel about these players as they morph into massive marketplaces (a nicer word than "mall")? Judging from the comments of retailers at the workshop, eBay is a retailer-friendly organization while Amazon remains a difficult partner. This does not mean that retailers should avoid Amazon and focus on eBay to broaden their shopper bases, but rather it's more evidence that Amazon continues to experience growing pains as it refocuses around serving retailers as customers.

Email keeps on truckin'. Despite a huge proliferation of spam, open and click-through rates remain steady at 39% and 5%, respectively. We think that's partly because retailers are successfully navigating around issues like spam, deliverability, and a fast-changing regulatory climate to optimize email programs. While most retailers send email weekly or biweekly, many now also segment campaigns by key data points like channel preference, purchase history, and geography, and an increasing number use email to drive physical store traffic. If you're not sure if your retail email program exudes best practices, take our email self-test or ask us to review your campaigns.

Bleeding-edge digital marketing apps struggle to find a retail fit. At the workshop, we also discussed how to tap into social networks like Friendster or Tribe, use games, or develop text messaging campaigns to sell more stuff. But so far, few US retailers are biting on these emerging digital marketing tactics (though brand marketers like Apple, Adidas, or Audi might want to test them). Instead, the eCommerce crowd remains focused on maximizing the ROI from existing digital marketing programs like shopping portals, search engines, email, and affiliates. All are proven to work. All are ripe for optimization. Look for more research from us on these and other digital marketing topics throughout the year.



Kate Delhagen
Vice President, Retail Research

P.S. We're always looking for retail digital marketing ROI stories! Send examples of your most effective email campaigns with key metrics to kdelhagen@forrester.com.

Research Referenced In This Issue Amazon.com And eBay Shoppers' Loyalty (33897) Choosing The Right Search Marketing Tools (16855) How Good Is Your Email Marketing? (33524) Indian Offshore Suppliers: The Market Leaders (34181) Kmart, Target, And Wal-Mart Shoppers' Loyalty (34265) Left Brain Marketing (33961)    Online Privacy Concerns: More Than Hype (34215) Portals Will Introduce Comparison-Shopping To The Masses (33621) Q1 2004 Online Sales: Record Growth Again (34305) RFID Reader Incompatibilities Create Hurdles For Adoption (34228) The Future Of Amazon.com (16873)    The Retail Point-Of-Service Transformation (33806)    The State Of Email Marketing 2004 (33959) US Mobile Marketing Is Still Two Years Away (33617) What's An Active Dashboard Without A Framework? (34117) Why Marketing Should Own The Contact Center (34134)

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