Report: Successful Online Retailers Give Shoppers Value, Unique Features

A new report released by, the online retailers association,
the most successful online retailers will be those that give consumers the
most value and offer features that are hard for others to duplicate.

The report is based on an in-depth survey of 127 online retailers conducted
by The Boston Consulting Group and is the first in what will be a series of
semi-annual reports by the two groups.

The study examined data gathered from a large sample of online retailers
and discusses such factors as myths about online retailing and its future,
how convergence of online and conventional retailers will drive growth and
the best practices leading online retailers are using.

Some of the studies key findings were:

  • The online retail market is experiencing growth of more than 200
    percent a year.
  • The top 10 publicly-traded online retailers have experienced growth of
    more than 160 percent over the past year.
  • Only 5 percent of unique site visitors become customers. Of that total,
    only 1.6 percent of visits result in purchases.
  • North American retailers’ online revenues for the first six months of
    1998 amounted to $4.4 billion, or less than 1 percent of overall revenue.
  • For 1998, online retailer revenues will total more than $13 billion. Of
    that amount, multichannel retailers like Dell Computer Corp., Charles
    Schwab and Lands End will account for 59 percent of revenues.
  • Sixty-five percent of the revenues generated by’s sample
    retailers are reinvested in marketing and advertising, compared to 4
    percent for traditional retailers.
  • Online retailers spend $26 per order on marketing and advertising
    compared to just $2.50 for traditional stores.
  • Computer goods, entertainment, travel and brokerage services account
    for 80 percent of the online retail market.

The survey said portals won’t capture all the online retail business.
Instead, the dynamics will shift to give more power to strong retail sites
that are successful in building their brands and customer bases.

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