Report: E-Commerce to Replace Affiliate Marketing

Today’s affiliate marketing and e-commerce programs will evolve from
one-size-fits-all links to one of three models: syndicated boutiques,
e-commerce networks or “elastic retailers,” says a new industry report.

The report from Forrester Research Inc. says that retail
and media firms will increasingly “share ownership of traffic, revenue,
merchandising and content to drive revenue and increase brand awareness.”

“Commerce and content companies need each other more than ever,” said Jim
Nail, senior analyst in New Media Research at Forrester. “Today’s popular
affiliate program structure will be replaced by what Forrester calls
cooperative e-commerce, designed to satisfy increasing consumer demand for
self-service, to diversify revenue streams and to offer a shopping experience
that will engender loyalty.”

Syndicated boutiques will replace simple links at small content sites,
featuring pop-up microstores using automated merchandising and store-building
tools to offer a small selection of branded products for purchase without
leaving the content.

The report says small niche sites will be able to
convert customers on the spot through affiliation with brand names and
intercept new customers who elude advertising by offering bonuses to
first-time buyers.

In commerce networks, media and merchant sites can create new buying
opportunities by combining exclusive content with relevant product offers.
When an article generates interest, commerce networks can deliver a one-click
buying experience from a known and trusted merchant that delivers the
product, the report says.

Elastic retailing evolves when merchants that target similar customer bases
and offer complementary product lines create affiliations among themselves
the way commerce networks link strong content to commerce.

Merchants partner
with complementary retailers to meet all their target customers’ needs for
advice, recommendations and products. In sharing the cost of merchandising,
retailers spend less per customer without changing their vertical economies
of scale, the report says.

“Retailers need to have a plan in place once cooperative affiliation starts,”
said Nail. “Merchants must define their audience, identify their dream team
list, and turn business development loose to sign deals.”

For the “New Affiliate Marketing Models” report, Forrester interviewed 50
retailers with active affiliate programs that have been in place for at least
three months. On average, these retailers have more than 10,270 affiliates
that currently generate 13 percent of total online revenues.

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