Study: Offline Retailers Should Rethink Web ROI

Most offline retailers might be proactive in having online Web sites, but they’re missing the boat when it comes to determining how successful they are in creating sales, according to a report released this week by Jupiter Media Metrix.

Indeed, New York-based Jupiter says a whopping 69 percent of retailers are wrongly judging the success of their Internet investments.

Analysts at the firm say companies often look only at online sales and profits — and not at the “non-transactional” benefits of their sites — such as offline sales that influenced by Web marketing. If they take that sort of thing into consideration, retailers will that the return on investment of their Web sites is 65 percent on average higher, Jupiter said.

“Retailers should not blindly follow the lead of their pure-play [Internet] competitors by adopting a laser-like focus on the profitability of their Web sites,” said Jupiter senior analyst Ken Cassar. “A typical brick-and-mortar retailer’s Web site can yield financial benefits well beyond the transactions it generates. Jupiter estimates that nearly two-thirds of the total online benefit for retailers will be in offline transactions influenced by online experience.”

Instead, Jupiter found that retailers really only “pay lip service” to the value their sites have to their stores, tracking metrics that treat their sites as selling channels, rather than marketing tools. According to a recent survey of retail executives, 46 percent Web cited sales as the primary metric on which they base the success of their sites, followed by 23 percent that are focused on profit.

Meanwhile, a Jupiter consumer survey reveals that 45 percent of consumers have used a retailer’s Web sites to research a product before buying it in that same company ‘s store.

As a result, Jupiter analysts say that only Internet pure-play retailers should focus solely on deriving profits from their Web sites.

“Brick-and-mortar retailers cannot ignore the impact that their Web sites have on store purchasing because it is difficult to quantify,” Cassar said. “The retailer that spends its limited Web resources shoring up the transactional elements of its site at the expense of the elements that would send a customer with purchase-intent into its stores may ultimately lose offline market share to smart competitors.”