According to the National Retail Organization, online retail should grow to $204 billion this year, which represents a 17% increase over last year. (Many experts predicted a 20% increase in 2008.) Considering the economy is in a slump, this is very welcome news to online retailers. I personally am not surprised. At Vitabase, our first quarter was up very dramatically over the same period last year.
As is normally the case, the top categories for online retail include apparel, electronics, and cars.
I am especially interested in some other data in the report. For example, 53% of online retailers are spending their marketing budget on customer acquisition while 21% are more focused on customer retention.
The real shift in thinking though is in the approach to social marketing and widgets. 65% say they are going to focus more on social networking advertisements (I am not sure if they mean viral campaigns or actually buying ads on social sites.)
55% of online retailers want to focus more on widgets. Widgets are those little snippets of code that run on desktops or other websites and perform some small service while giving the originating company exposure. We are starting to see more and more widgets. Ebay and Amazon are both experimenting with them. Many a SEO campaign has been built on a widget strategy–every time a widget is placed on another site, it generates a valuable(?) link back to the originating site.
Are widgets a valuable SEO strategy? In the past, they undoubtedly were, but it is hard to believe they will be as effective in the future. However, for branding and exposure, successful widgets are very valuable. The question is how many widgets can the market handle (have you logged into Facebook lately?). At some point, it just gets silly.
These are fascinating times. It will be interesting to watch these viral marketing campaigns evolve. I still believe that the best viral campaign is a good product, but I may be proven wrong.