Internet Retail Industry Trends

Growth in Online Households

The growth in retail purchases online will be due in large part to new online buyers, not just increased buying by veteran online shoppers. More than 55 percent of all US households have Internet access. Broadband access has increased to more than 30 percent of households, making online purchasing faster. Jupiter Research predicts that the number of people who shop online will grow about 50 percent by 2008.

Improved Security Technology

Multiple vendors are providing security solutions for Internet retailers. Security is the biggest concern for shoppers, and authenticating shoppers online is retailers’ biggest worry. An authentication system using a personal code, similar to ATMs, has been developed, and a database of compromised credit card numbers compiled to help retailers identify potentially fraudulent transactions.

Technology Alliances

Internet retailers are allying with marketing analytic firms to better mine customer data. Catalog companies have long used the information provided by customers to learn more about them and to target specific catalogs based on interests and past purchase behavior. Alliances with companies that offer secure payment processing are helping allay consumer privacy fears.

One-to-One Marketing

Marketing segmentation techniques have become so specialized that retailers can personalize catalogs and websites. Catalog companies have multiple versions of the same catalog emphasizing different products based on the buying patterns of their customer base. Personalized messages can be placed on targeted catalogs based on customer addresses. As home pages get less traffic and customers enter retailer sites from other entry points, Internet sites are being remodeled for custom messaging. Consumer-centric content and messages based on past shopping behavior are replacing generic advertising messages.