[May 08, 2009] Retailers turn to Web strategies to maximize sales during downturn Tweet May 08, 2009 (San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) -- Online retailers believe they are in a better position to weather the recession than bricks-and-mortar-only stores, and that stepping up their online marketing efforts is one way to gain on their competition. This strategy, according to a study released this week, manifests itself in multiple ways, including: --Shifting marketing plans from traditional advertising to social-networking sites such as Twitter and Facebook. --Sending targeted e-mails to customers based on their stated preferences or past purchases. --An emphasis on deep discounts and specials obtained online and used for purchases online and in person. --Interactive features such as videos and options that give customers the ability to share items they like with friends. "In this changed environment, it's become increasingly more difficult to figure out a marketing strategy," said Sucharita Mulpuru, a principal analyst for Forrester Research and lead author of the "State of Retailing Online 2009" report. "But there is a tailwind supporting e-commerce as a way to capture market share from competitors who are waning." The survey of 117 unnamed e-commerce retailers -- some with physical stores -- was conducted by Internet analysis firm Forrester for Shop.org, the online arm of the National Retail Federation. Forrester forecast in January that total U.S. online sales will increase 11 percent in 2009, to $156.1 billion, compared with a 13 percent gain in 2008. For 2010, growth is predicted at 13 percent. San Francisco-based Gap, the parent company for the namesake brand and Banana Republic, Old Navy and Web-only stores Piperlime and Athleta, saw its online sales reach $1 billion in 2008, a 14 percent increase over 2007. "The company's e-commerce division continues to be a strong source of growth for the company," said spokeswoman Sarah Anderson. "We're constantly looking for innovative ways to connect with our customers and provide them with a more enticing shopping experience." That includes a function that allows access to all the company's brands from each of its sites, as well as universal checkout with a flat shipping rate of $7. Since the features launched last year, traffic and sales orders have increased 8 percent each, Anderson said. Premium Outlets, which owns the Gilroy center, started tweeting (http://twitter.com/premiumoutlets) in March "as an enhanced way of communicating with shoppers, giving updates and tips on how to get the best deals," said spokeswoman Kristyn Mendez. Membership has been growing in the free VIP Shopper Club, where members can access exclusive online coupons, vouchers, insider information and updates about upcoming sales and events. "We are seeing the most sophisticated shoppers seeking online coupons, viewing our sales and events and essentially doing their homework to get the best deal," Mendez said. Promotions, discounts and rebates have become common on Web sites, according to the E-tailing Group, an e-commerce research firm. It reports that sales and specials appear on 96 percent of retail sites and include offers for free shipping and limited-quantity or timed promotions designed to entice consumers to go from browsing to buying. Next week, Internet Retailer unveils its Top 500 Guide, the only ranking of America's 500 largest e-retailers. Predictably, Amazon.com is in the top spot. Amazon spokesman Craig Berman said "nothing's changed" for the Seattle company, and that its long-entrenched marketing strategy of low prices, wide selection and fast delivery has been a plus in the current environment. Amazon's global sales were $4.89 billion in 2008, up 18 percent from $4.13 billion a year earlier. While growth in retail sales on the Internet continue to outpace traditional sales, e-commerce isn't viewed as the industry savior amid current economic challenges. The Forrester survey shows more than half of respondents (54 percent) expect overall retail growth to slow during the next 12 months. "Retailers everywhere are trying to get their arms around a pullback in consumer spending, and online retailers are no exception," said Scott Silverman, executive director of Shop.org. Contact Donna Kato at [email protected]. --Gilroy Premium Outlets is reaching customers through Facebook updates and Twitter tweets. Also offers VIP membership online that gives customers access to special deals and coupons. --Gap and its brands Old Navy, Banana Republic, Piperlime and Athleta can be browsed and bought on one Web site. A $7 flat rate for shipping encourages multiple purchases. --H&M, the "fast fashion" boutique, offers fashion and designer bio videos, a style guide and an interactive feature that allows women and men to create a model in their likeness to try on clothing. --KMart is active on Facebook, Twitter, YouTube and MySpace, and its mykmart.com. has a community page for discussions and seeking advice about products. --Sears" site has a function that allows visitors to browse other sites in its holdings, including KMart and Lands" End. --Nordstrom and Neiman Marcus are among the department stores that use multimedia and their stores" fashion directors to engage high-end customers. To see more of the San Jose Mercury News, or to subscribe to the newspaper, go to http://www.mercurynews.com. Copyright (c) 2009, San Jose Mercury News, Calif. Distributed by McClatchy-Tribune Information Services. 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